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BOSTON
PUBLIC
LIBRARY

Departtnvn t

The Official Monthly Record of United States Foreign Policy / Volume 84 / Number 2088

1949 — NATO — 1984

cimiWifes

North Atlantic Council/1

Department of State

bulletin

Volume 84 / Number 2088 / July 1984

The Department of State Bulletin,
published by the Office of Public
Communication in the Bureau of Public
Affairs, is the official record of U.S.
foreign policy. Its purpose is to provide the
public, the Congress, and government
agencies with information on developments
in U.S. foreign relations and the work of
the Department of State and the Foreign
Service.

The Bulletin's contents include major
addresses and news conferences of the
President and the Secretary of State;
statements made before congressional
committees by the Secretary and other
senior State Department officials; selected
press releases issued by the White House,
the Department, and the U.S. Mission to
the United Nations; and treaties and other
agreements to which the United States is
or may become a party. Special features,
articles, and other supportive material
(such as maps, charts, photographs, and
graphs) are published frequently to
provide additional information on current
issues but should not necessarily be
interpreted as official U.S. policy
statements.

GEORGE P. SHULTZ

Secretary of State

JOHN HUGHES

Assistant Secretary for Public Affairs

PAUL E. AUERSWALD

Director,

Office of Public Communication

NORMAN HOWARD

Chief, Editorial Division

PHYLLIS A. YOUNG

Editor

SHARON R. LOTZ

Assistant Editor

The Secretary of State has determined that the
publication of this periodical is necessary in the
transaction of the public business required by law of
this Department. Use of funds for printing this
periodical has been approved by the Director of the
Office of Management and Budget through March 31 .
1987.

Department of State BULLETIN (ISSN 0041-7610
is published monthly (plus annual index) by the
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For sale by the Superintendent of Documents, U.S
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20402

CONTENTS

FEATURE

1 North Atlantic Council Meets in Washington (Vice Presi-
dent Bush, Claude Cheysson, Joseph M.A.H. Luns,
President Reagan, Secretary Shultz, Texts of Final
Communique and Annex, Washington Statement on
East-West Relations, Proclamation)

18 Secretary Shultz's Interview for "Worldnet"

22 35 Years of NATO

rhe President

7 The Struggle for Freedom in

Latin America
i8 Berlin — A Very Special Place for

America
'9 News Conferences of May 22 and

June 14 (Excerpts)

he Secretary

5 A Steady Course for American
Foreign Policy

8 Address Before the American

Society of Newspaper Editors

irms Control

"2. Arresting the Nuclear Genie

(Kenneth L. Adehnan)
5 Western Proposals at MBFR

I Talks (President Reagan,

Western Statement)
*5 ASAT Arms Control (Kenneth L.
Adehnan)

ast Asia

B U.S.-China Relations (Paul D.

Wolfowitz)
1 Visit of Thailand's Prime Minister

(Prem Tinsulanonda, President

Reagan)

conomics

.2 Looking Toward London: 10

Years of Economic Summitry
(W. Allen Wallis)
5 The American Trade Deficit in

Perspective (Arthur F. Burns)
7 50th Anniversary of Reciprocal
Trade Act (Department State-
ment)

'9 Japan Eases Restrictions on Yen
(Donald T. Regan)

60 Review of East- West Economic

Relations (W. Allen Wallis)
63 The Logic and Politics of the

Next Trade Round (Denis

Lamb)
65 Foreign Policy: Its Impact on

Agricultural Trade (W. Allen

Wallis)
68 Examining the Unitary Tax

(W. Allen Wallis)

Europe

70 The Atlantic Alliance and the U.S.
National Interest (Jeane J.
Kirkpatrick)

73 18th Report on Cyprus (Message
to the Congress)

75 Situation on Cyprus (President
Reagan)

75 U.S.-U.S.S.R. Trade and Eco-
nomic Council Meeting (Mark
Palmer)

Human Rights

77 The Baltic States' Struggle for
Freedom (Elliott Abrams)

Middle East

U.S. Response to Saudi Request
for Military Assistance
{Michael H. Armacost)

U.S. to Supply Military Equip-
ment to Saudi Arabia (Depart-
ment Announcements)

United Nations

82 Challenge to Israel's Participation

in UPU (Department Announce-
ment)

Western Hemisphere

83 Visit of El Salvador's President-

Elect (Joint Communique)

83 Election of El Salvador President

Duarte (President. Reagan)

84 Secretary Shultz Visits El

Salvador and Nicaragua
(Secretary Shultz)

85 Visit of Mexican President

(Miguel de la Madrid Hurtado,
President Reagan)

Treaties

88 Current Actions

Chronology

90 May 1984

Press Releases

93 Department of State

Publications

94 Department of State
94 GPO Subscriptions

Index

Secretary of State Dean Acheson signed the North Atlantic Treaty on behalf of the United
States on April 1, 1949, in Washington, D.C. President Truman and Vice President
Barkley (to the Secretary's right) witnessed the event. The Foreign Ministers who signed
for the II other nations were Paul-Henri Spaak (Belgium), Lester B. Pearson (Canada),
Gustav Rasmussen (Denmark). Hubert Schuman (France), Bjarni Benediktsson (Iceland).
Count Carlo Sforza (Italy), Joseph Bech (Luxembourg), Dirk I . Stikkcr (Netherlands).
Ilalvard M. Lange (Norway), .lose Caerio da Matta (Portugal), and Ernest Bevin (United
Kingdom).

FEATURE
NATO Ministerial

North Atlantic Council
Meets in Washington

The regular semiannual session of the North Atlantic
Council was held in Washington, D.C., May 29-31, 1984. The
meeting coincided with the 35th anniversary of the signing of
the North Atlantic Treaty.

Following are remarks by Vice President Bush, Secretary
General Luns, and Honorary President Cheysson at the
opening session; exchange of dinner toasts between President
Reagan and Secretary General Luns; remarks by President
Reagan; the final communique, with annex; the Washington
Statement on East-West Relations; and Secretary Shultz's news
conference.

, OPENING SESSION,
NORTH ATLANTIC
COUNCIL,
MAY 29, 19841

Vice President Bush2

Mr. Secretary General, Minister of
Foreign Affairs [of France Claude
Cheysson and Honorary President],
representatives of the Atlantic alliance
and its 16 member nations, distinguished
guests. It is a special pleasure for me to
welcome you to Washington.

Thirty-five years ago, the North
Atlantic Treaty was signed in this city,
bringing the alliance into being. Since
then, the strength and resolution of our
partnership have frequently been tested
but never found wanting. Anniversaries
are a time for looking back and for look-
ing ahead, for drawing lessons from the
past and applying them to the future.
NATO can take great satisfaction in
what it has accomplished.

• Born of the statesmanship and vi-
sion of a handful of brilliant individuals,
the alliance has become much more than
even they could have dreamed.

• Peace has been guaranteed in a
region that knew no peace.

• Liberty has been preserved in
Western Europe and a barrier erected
against further Soviet advances.

• The greatest sustained wave of
economic and social development in
western history was fostered by the
security provided by the alliance.

• Building on that security and
prosperity, the West has led a transfor-
mation of society and economies on a
global scale, creating today's free, open,
and interdependent world system.

These achievements are cause for
great satisfaction. They give us con-
fidence in the future. But success should
not make us complacent. The next 35
years of the alliance will be as challeng-
ing as the first — and as full of oppor-
tunity.

What new challenges are on the
horizon for the alliance? I think there
are four primary areas to which we

ily 1984

Vice President Bush addresses the opening session of the North Atlantic Council
ministerial meeting at the Department of State on May 29, 1984.

must turn our attention. They are
familiar but fundamental:

First, preservation of the basic
values of western civilization, notably
the rights and dignity of the individual;

Second, strengthening our common
security, with particular emphasis on
conventional defenses;

Third, ensuring that freedom and
independence in the Third World is not
destroyed by aggression and subversion;
and

Fourth, building a more construc-
tive relationship with the Soviet Union
on a realistic and durable basis.

No one can have any doubt that the
human values which are at the root of
the alliance are under severe attack in
many parts of the world today. In the
past week, we have all been caught up
in the tragic plight of Andrei Sakharov
and his wife, Yelena Bonner. It is hard
for us even to comprehend, let alone
condone, a system where internal and
external travel and communication are
subject to such arbitrary state prohibi-
tion.

In the CSCE [Conference on Securi-
ty and Cooperation in Europe] Final Act
and the Madrid concluding document,
the alliance has led the effort to
establish international standards of
behavior in the human rights area. We
must work to ensure that these prin-
ciples are increasingly respected by all
states.

Turning to defense, the time has
come for the alliance to devote attention
to conventional defense improvements.
We must find ways to exploit the
tremendous inventiveness of Western
society, to bring together industries on
both sides of the Atlantic, and to explain
to our publics and parliaments what
needs to be done to counter Soviet con-
ventional forces.

Outside of Europe, the trail of
Soviet adventurism— from Asia to
Africa to Latin America— poses a threat
to the independence and territorial in-
tegrity of sovereign states. The nations
of the West have a continuing respon-
sibility to help the states of the Third
World protect themselves. Likewise, we
have a keen interest in extending the
conditions of peace, freedom, and stabili-
ty which we ourselves have enjoyed for
so long. As we have known in the
alliance for a long time, peace is
ultimately indivisible.

NATO has long sought to establish a
constructive relationship with the Soviet
Union. NATO has never sought conflict
or superiority. In 1967 the alliance ex-
pressed its readiness for dialogue and its
determination to maintain a strong
deterrent. There has been progress in
some areas, but there have also been
setbacks and disappointments.

• The Soviets did not respond ade-
quately to the positive incentives of-
fered.

•

• The Soviet military buildup did
not stop at parity but went on ac-
cumulating weapons of all kinds far
beyond Soviet defensive needs.

• Progress in Europe was not
matched by Soviet restraint elsewhere

Despite these Soviet actions, NATO }ii
has never ceased its efforts to build a
more constructive relationship. On the
basis of alliance strength and unity, the I
alliance has consistently sought to
engage the Soviet Union in a dialogue
on the full range of international issues, n
including human rights, bilateral affairs, il
regional conflicts, and arms control.

Speaking personally, I had the
privilege last month of presenting a
draft treaty to ban chemical weapons. I
wish I could tell you I was optimistic
about immediate progress in this impor-
tant area. I'm not optimistic, but we
must keep trying.

The alliance and the United States
have repeatedly called upon the Soviet
Union to return to the nuclear arms con
trol negotiations. We hope they will do
so as soon as possible.

Many things have changed since
1949. New generations have come to th
fore. Economies have been transformed
Our style of life and that of people
everywhere has been transformed.

But many things remain unchanged
The solidarity of the North Atlantic
alliance is still the pole around which
peace and security revolve. Our commo
commitment to democratic values is
alive and well. Our economies have
weathered difficulties and are now
entering into sustained noninflationary
growth. Our political and security ties
have survived the most severe political
and strategic challenge in a generation.
In my opinion, they have come through
not only intact but reinforced.

A symphony conductor once told a
story of how he would take his or-
chestra, usually by bus and country
roads, into the towns and small cities o:
the agricultural valley. His mission wasi
to reach new audiences and expose thei
to the finest of classical music. At the
conclusion of a concert in a rural school
auditorium, a concertgoer slipped a
message into his hand. It read: "I think
it is only fair to inform you that the ma
in your orchestra who blows the instru-
ment that pulls in and out only played
during the brief intervals when you wei
looking at him."

Department of State Bulleti

FEATURE

NATO Ministerial

In looking at the world, it's crucial
lot to misinterpret events. Make no
nistake about it. What we are seeing to-
lay among all the free peoples of our
lliance is an increased faith in the
iltimacy and power of freedom — and a
lardened resolve to take the steps
lecessary to secure free values.

It is a great pleasure to open this
neeting of the North Atlantic Council in
Vashington, the first meeting of NATO
"Weign Ministers here since 1949. It is
lso a great honor to share the podium
nth Joseph Luns, who has served so
bly as Secretary General of NATO
hrough such stirring times. He deserves
he heartiest thanks of everyone in the
lliance.

One of the fundamental facts of our
emocratic form of government is that
11 of us in office are the servants of our
eoples. As you are aware, this is an
lection year in the United States. I
mst, therefore, apologize for leaving
au now — back to the campaign trail,
lorida, then Texas.

I will take with me a strong sense of
le strength, unity, and continued vitali-
of the NATO alliance. I respect your
-;solve to maintain and nurture this
* reat partnership, and I know your
I lared vision of a just and real peace
ill inspire the discussions and plans
hich will follow.

onorary President
heysson

n the occasion of the anniversaries
hich are now being celebrated in my
•untry and elsewhere, we honour the
emory of all those who fell some 40
;ars ago in the greatest war mankind
is known. In recalling their sacrifice
id the sufferings and hardships of our
copies during a dramatic period in
hich the fundamental values of civiliza-
jn were at stake, we shall be more
ature, more inclined to appreciate our
liance and the true worth of the recon-
liation of our peoples, the solidarity of
ir nations, and the shared attachment
fundamental values which ensure
■spect for human dignity. Our deter-
ination to keep the peace, to make war
ipossible and even unthinkable, and to
rve the cause of freedom will be even
■eater.

This treaty is a simple document. The nations which
sign it agree to abide by the peaceful principles of the
United Nations, to maintain friendly relations and
economic cooperation with one another, to consult together
whenever the territory or independence of any one of them
is threatened, and to come to the aid of any one of them
which may be attacked.

President Truman
April 4, 1949

The honor and pleasure of opening
the proceedings of the ministerial
meeting fall to my lot today for the sec-
ond time, on this occasion in the United
States, the greatest and most powerful
of our member nations, in the city which
bears a glorious name, ever to be
remembered in the history of independ-
ent nations. Let us, therefore, recall
with pride those fundamental principles
which led our nations, in this city, to
make a treaty unique in its spirit and its
results. The same principles still guide
our actions today, when international
relationships— and above all East- West
relations — are passing through a phase
made clamorous by its associated
rhetoric and extremely distressing by
reason of the increasing number of
threats. The decision, taken on the
initiative of one of our colleagues, to
make a careful study of developments in
East- West relations reflects our desire
for a better analysis of the reasons for
this situation and will, therefore, enable
us to define our joint course of action.

The first essential is to make the
analysis. What are the reasons for the
present tension? What are the new fac-
tors involved in it? The relationship
which we had built up with the U.S.S.R.,
on the basis of dialogue and with a view
to achieving balance and in which the
Helsinki agreements are a major ele-
ment, have deteriorated. The respon-
sibility for this is certainly not ours. The
U.S.S.R. has demonstrated by its
behavior that the concept of detente
which inspired us was inadequate.

I refer primarily to the invasion of
Afghanistan, the crushing of the aspira-
tions of the Polish people and the denial
of the freedoms which they had only just

regained, and, unfortunately, a more
general contempt for human rights and
disregard for the Helsinki agreements,
symbolized in our minds by the man and
wife now detained in Gorky.

These actions have been accom-
plished by a major buildup of conven-
tional weaponry and by the significant
upgrading of Soviet nuclear capability,
on land and sea, demonstrating the
drive to gain superiority and the power
to intimidate which flows from it. The
clearest outward sign of this process,
and the direct cause of the tension which
affects us today, has been the deploy-
ment of Soviet intermediate range
missiles.

No one can deny that this has upset,
or even destroyed, the balance of forces.
However, I am not saying that there is
any desire for war, but who can doubt
the determination to subject our alliance
to formidable psychological and political
pressure, at least in continental Europe?

The nations concerned, mindful of
this danger, took the 1979 two-track
decision. They have stated that they
would not be the first to make a move;
their desire was not to gain an advan-
tage but to restore the balance which
was an essential condition for peace, and
they restated their determination. I
repeat, balance is the guarantee of
peace.

This decision has been implemented
calmly and soberly. Thus 6 months ago,
in Brussels, I was able, on behalf of us
all, to applaud this act of calm courage
in the defense of peace through the
balance of forces.

At the same time, we kept on stress-
ing that we would prefer to maintain the
balance by way of negotiation, the

Jly 1984

ultimate aim of which would be agree-
ment on the lowest possible level of ar-
maments, particularly nuclear weapons.

The difficulties put in the way of
these negotiations by the introduction of
extraneous matters did not come from
the Western side, nor did the West
cause the negotiations to be broken off.
The West had made no attempt to alarm
and worry the public by resorting to
histrionics. As we know, these attempts
have failed; our peoples have not al-
lowed themselves to be influenced. With
regret — because they hoped until the
very last moment that the negotiations
would be successful — they accepted the
deployment agreed for the end of 1983
because it was necessary, and this
deployment has taken place.

Of course, this situation still gives
cause for concern. New weapons are
already being announced, and the
danger of a new stage in the arms race
is already becoming apparent.

During this period there is no
dialogue; it must be stated, restated,
and proclaimed from the rooftops, is an
intolerable paradox!

Let no one anywhere doubt our will-
ingness to discuss, to negotiate, to seek
an understanding. Abuse in public is no
substitute for discussion around the
negotiating table. I reiterate here, on
behalf of us all with all the force and
conviction at my command, that the na-
tions of the Atlantic alliance are
prepared for discussion and wish to
establish and guarantee a true balance
of forces at the lowest possible level. In
this spirit, they support the continuation
of the Stockholm talks, at which they
and the neutral and nonaligned nations
made constructive and specific proposals
which would be given serious and
careful consideration by our opposite
numbers in the East, without confining
the discussion to a consideration of
statements which have been trotted out
all too often in the past. In this spirit,
too, the allies call for the resumption of
negotiations on strategic and inter-
mediate-range nuclear weapons. Able, as
we are, to count on the grit and deter-
mination of our peoples, committed, as
we are, to a defense effort which is and
must be commensurate with our will for
peace, we want to negotiate with the
governments of the other countries of
Europe.

Above: Vice President greets Turkish
Foreign Minister Halefoglu (top photo) and
Greek Foreign Minister Haralambopoulos.
Below: Secretary Shultz confers with West
German Foreign Minister Genscher (top
photo) and British Foreign Secretary
Howe.

(NA 1" photos)

We also want to maintain and ex-
pand our relations with peoples who, for
centuries, have shared the same aspira-
tions, developed historically along the
same lines as many countries
represented here. We intend to pursue
and expand our economic and trading
connections. It is our desire to preserve
or rediscover the manifold cultural ties
which our forefathers developed
together. We owe it to the men and
women of Europe, who have not sudden-
ly changed because a curtain has
descended among them. We owe it to
Man, as a free individual, to Man who
-per se is entitled to respect. Does anyone It
really believe that these ideas which we
cherish would be better served if we
were to close the windows and doors of
our world, if we were to refuse all con-
tact, all fellowship, all commercial inter-
course, and all meetings, if we were to
behave as though our brothers and
sisters in Eastern Europe had vanished
from the face of the earth? Definitely
not.

France, the ever-faithful ally — does
anyone doubt it? — proud of its in-
dependence— as everyone is aware —
intends to play its part in the realizatior
of what the public now accepts as post-
Yalta Europe. In remembrance of a
bygone Europe, France will undertake
to use its best endeavors.

I now turn toward you, Mr. Secre-
tary General, you who for so long have
been the personification of our alliance,
the mouthpiece of its needs, its con-
cerns, its requirements, its values. You
have voiced them with characteristic
frankness and also with the robust gooc
humor for which you are well known
and which no longer takes us by sur-
prise. We are all in your debt, and I
shall have the opportunity on another
occasion of describing your colorful,
12-year stewardship of the Atlantic
alliance. I will not go into the crises, thd
periods of tension, and your warnings ii
the face of the imbalances which were
occurring.

The time has not yet come to sing
your praises as a man of independent
mind and a man of principle. But the
time has come for me to hand over to
you and allow you once again, and for
the last time, to display your outstand
ing qualities during this Washington
meeting. Once more, the deliberations
taking place under your chairmanship

■

iir
i
i
u

111

ike

Department of State Bulleti

FEATURE

NATO Ministerial

irill prove that your appeals have not
alien on deaf ears. I am convinced that
his meeting of the North Atlantic Coun-
il will be able to demonstrate the
olidarity, the cohesion, the stead-
astness of its members in the defense
f liberty and peace in the course of the
ession which is now open.

Secretary General Luns

am sure that everyone who has trav-
led here for this spring 1984 meeting of
ie Foreign Ministers of the North
tlantic Treaty Organization shares my
snse of deep gratitude to our host, the
overnment of the United States of
merica. As the cradle of the alliance,
ie lovely and historic city of
'ashington, D.C., is a particularly apt
jnue for our gathering in this, the 35th
miversary year of NATO's birth. The
mbolism of our location is further
inched by the fact that this year
arks as well the centennial of the birth
' Harry S. Truman, that great
merican President without whose vi-
Dn the Atlantic alliance might never
u.ve come into being.

It is a rare privilege for me to be
»le to pay public tribute here to the
<emory of President Truman whose
adership in world affairs won a place
r him among the greatest Western
atesmen of modern times. Today those

our leaders who would like to honor
<e memory of Harry Truman and
knowledge the debt which free men
roughout the world owe to him could
>t do better than attempt to imitate his
urage and his decisiveness when faced
th difficult options and also his deter-
ination to mould public opinion rather
an follow it. The capacity to act in this
ay is especially necessary at this par-
:ular moment when the countries of
e West are going through another
riod of difficult options.

As my term as Secretary General
■aws to an end, if it were in my power

fulfill the first of all the wishes I
ake for the alliance, this wish would be
at NATO should forever enjoy the
(lightened leadership which Harry
mman managed to exercise with such
ill and drive. Without leadership of
is caliber, the "disarray" to which
ference is being made so often now
ight well become more than just
shionable speculation. Far be it for me

ly 1984

to preach self-satisfaction, but I am
firmly convinced that our shared in-
terests and values far outweigh our dif-
ferences here or there. When all is said
and done, in an alliance of sovereign na-
tions differences are perfectly natural,
and in any case we possess suitable
machinery for dealing with them. If we
find ourselves in a difficult international
situation, responsibility for it can in no
way be attributed to the alliance. We,
for our part, have never used our
weapons, and we will never do so unless
attacked. As last December's Brussels
declaration made clear, we have not
given up our policy of the outstretched
hand. It really is the other side which
has complicated the dialogue and which
seeks, for example, to lay down precon-
ditions for the resumption of the talks
on the control of nuclear weapons.

In the present situation, firm leader-
ship on either side of the Atlantic is
more vital than ever. Unavoidably the
greater part of that burden rests with
the United States. It must exercise
leadership at home to preserve a solid
domestic constituency for the NATO
commitment, and within the alliance,
itself, to foster transatlantic harmony.
Within the alliance, Washington has
traditionally been more attentive to
European viewpoints and sensitivities
than it usually receives credit for but
still more is required. Simply put, the
United States must make a greater ef-
fort to order what it sees as NATO's
priorities, to consult the other allies
about them before they become full-
blown U.S. national policy objectives,
and to deepen its grasp of the political,
economic, and social determinants of

35th Anniversary of NATO

PROCLAMATION 5158,
MAR. 6, 19841

Thirty-five years ago, on April 4, 1949, the
North Atlantic Treaty was signed in Wash-
ington. Established in the dark aftermath of
the most destructive war the world had ever
seen, the NATO Alliance represents a living
commitment of the nations of the West to the
defense of democracy and individual liberty.
By uniting Europe and North America in this
way, it has deterred war between NATO and
the Warsaw Pact for three and a half decades
and made possible the longest period of peace
and prosperity in modern history.

This success has not been won without
effort. Throughout its history, the NATO
Alliance has been challenged by the military
power and political ambitions of the Soviet
Union. Yet, in every decade, the nations of the
Alliance have consistently pulled together to
maintain peace through their collective
strength and determination. On the basis of
that strength and unity, the nations of the
Alliance also have taken the initiative to seek a
more constructive relationship with the Soviet
Union.

Over the years, NATO has grown from its
original twelve members to include Greece,
Turkey, the Federal Republic of Germany,
and, most recently, Spain. It has demonstrated
a capacity to adapt to evolving political and
security challenges and to meet the changing
needs of its members. The Alliance's commit-
ment to collective security has been sustained
through full democratic respect for the
sovereign independence of each member.

I am proud to rededicate the United States
to the ideals and responsibilities of our
Alliance. In May, the United States will host
in Washington the spring meeting of NATO
foreign ministers. This will be a special oppor-
tunity to celebrate the thirty-fifth anniversary
of our common enterprise and to consider the
future challenges facing the transatlantic part-
nership. I call upon the Congress and people of
the United States to join me in expressing our
support for a bond which has served us so well
over the years and which will continue to be
essential to our welfare in the future.

NOW, THEREFORE, I, RONALD REAGAN,
President of the United States of America, do
hereby direct the attention of the Nation to
this thirth-fifth anniversary of the signing of
the North Atlantic Treaty, and I call upon the
Governors of the States and upon the officers
of local governments to facilitate the suitable
observance of this notable event throughout
this anniversary year with particular attention
to April, the month which marks the historic
signing ceremony, and May, the month which
marks the meeting of the North Atlantic Coun-
cil in Washington.

IN WITNESS WHEREOF, I have hereunto
set my hand this 6th day of March, in the year
of our Lord nineteen hundred and eighty-four,
and of the Independence of the United States
of America the two hundred and eighth.

RONALD REAGAN

'Text from Weekly Compilation of
Presidential Documents of Mar. 12, 1984 I

contemporary European attitudes and of
how best to influence positively those at-
titudes.

If there is a need for a more
sophisticated U.S. appreciation for
European political imperatives, it is at
least matched by a requirement for
greater European understanding of the
dynamics of U.S. politics. It is equally
important that European political
leaders be more assertive in forthrightly
explaining to their electorates why there
is no substitute on the horizon for a
strong transatlantic security partnership
and to contradict the pernicious notion
that Washington and Moscow somehow
share equal blame for all the ills in the
East- West relationship. They must ac-
tively rebut such illusions as the one that
holds that it is possible simultaneously to
be for NATO and against full implemen-
tation of the December 1979 decision on
nuclear force modernization. They must
speak out with greater clarity on the
essentials of balanced arms control
policies and give greater publicity to the
enormous effort invested by the allies,
including the United States, in devising
equitable proposals and to the largely
cynical and manipulative Soviet response
to that effort.

Given the sort of leadership, I have
just described, I believe all of us can
look forward with optimism to NATO's
future. My own confidence in its future
has been reinforced by how well the
alliance has done and how fortunate it
has been in the choice of my successor.
Having begun these remarks with a
salute to a great Western statesman of
the past, I take pleasure in concluding
them with the wish that a great
Western statesman of the present, Lord
Carrington, will prosper in his new of-
fice and that he will enjoy the same sup-
port, cooperation, and kindness that I
have unfailingly received during my own
term as the Secretary General of the
North Atlantic Treaty Organization.

President Reagan hosts a dinner at the
White House on May .'10, 1984, for the
North Atlantic Council ministers and
presents the Medal of Freedom to NATO
Secretary General Luns.

DINNER TOASTS,
THE WHITE HOUSE,
MAY 30, 19843

President Reagan

It's an honor and a pleasure to welcome
our NATO partners to the White House.
This evening has been a special oppor-
tunity to celebrate the unprecedented
success of our enduring friendship, our
partnership, an alliance dedicated to
peace and freedom.

Thirty-five years ago, in the troubled
aftermath of a tragic conflict, 12 nations
met here in Washington to sign the
North Atlantic Treaty. That event was
an act of realism. The member nations
recognized the threat to their security
and undertook to meet it together.

The establishment of the North
Atlantic alliance was also an act of op-
timism—an affirmation of the enduring
vitality of western civilization. Thirty-
five years of peace, with freedom,
testified to the wisdom and the foresight
of those nations and of the four other
nations which have since joined NATO.

Although the founders could not
have forseen the dramatic changes that
have taken place since 1949, their vision
was right on the mark. By uniting
Europe and North America, NATO has
made possible the longest period of
peace and prosperity in modern history.
And today our proud alliance remains

united in its commitment to the defense
of democracy and individual liberty.

We cannot be content with the ac-
complishments of the past. As we look
ahead, there are compelling reasons to
strengthen, even further, our solidarity
and unity. Our commitment to collective
security will continue to be an indispen-
sable bulwark against aggression, ter-
rorism, and tyranny.

Our unity will be the essential
framework for building a constructive
dialogue with our adversaries and reduc-
ing the risks of war and the level of
nuclear arms. And I know that it will be
our societies, the democracies, that will
offer a bright and hopeful future for our*
people and for people everywhere.

We can be confident. The events of
the past year challenged us. And the
Western democracies stood firm in the
face of an intense Soviet campaign of in
timidation, aimed at undermining
NATO's commitment to defend Europe
and preserve peace. Today we are
stronger and more conscious of our uni-
ty. And that's of crucial importance,
because when the Soviet Union becomes
convinced that NATO cannot be shaken
it may finally realize it has a clear and
compelling interest to return to the
negotiating table. We will be waiting,
ready to meet them halfway.

Tonight is more than a celebration
of an anniversary. It's also an opportun
ty to recognize the special contributions
of our Secretary General. Joseph Luns

FEATURE

NATO Ministerial

is a distinguished diplomat and a man of
| many virtues.

First, as the Dutch Foreign
Minister, and then, at NATO's helm, he's
been at the center of the transatlantic
bridge for nearly 30 years. His vision,
his humor, and his patience have sus-
tained us in good times and bad. As
Secretary General, he's never lost sight
of the goals and objectives of our
alliance, and peace has been his profes-
sion.

You have been a trusted friend, an
honest broker, a respected colleague,
and, above all, an invaluable leader of
the Atlantic alliance. Joseph, you've said
that the state of our alliance is like
Wagner's music, better than it sounds.
'Laughter]

I must tell you that, thanks largely
to your efforts, I rather like the way the
illiance sounds. And I hope that, even in
-etirement, you will still watch over our
Dartnership and that you will not
lesitate to share your counsel with us.

In recognition of Joseph Luns' un-
common dedication to the ideals of our
alliance and in tribute to his outstanding
! service and enduring contributions to
>ur freedom and security, it is my great
>rivilege to bestow America's highest
■ivilian award — the Medal of Free-
dom— on Secretary General Luns.

But, before I invite him to receive
ihe medal, I would ask that you raise
our glasses and join me in a toast to
Secretary General Joseph Luns and to
he organization he has faithfully served
.nd so ably guided.

secretary General Luns

feel greatly flattered, deeply honored,
nmensely proud by having received
rom your hands this very special award,
/hich I value highly and for which I am
lery, very grateful. Thank you very
luch indeed.

May I say that I have now been
early 13 years Secretary General of
nis great organization, and looking back
n those 13 years, I must and I want to
ratefully acknowledge the immense role
ie United States has played in this
lliance. Far from being a hegemonic
ower, far from imposing your wishes
nd your will on your allies in an alliance
here every decision must be taken by
lanimity, you have always taken into

NATO is unique in many respects. Of these, the most
important by far is our common support of spiritual and
moral values. . . . All of us are devoted to the twin ideals of
peace and justice, neither of which can live lony without the
other.

President Eisenhower
April 2, 1959

account the views and the opinions of
your European allies. And it is simply a
truism to say that without the presence
of more than 300,000 of your sons in
Europe, the world would be a far worse
place than it is now. And I would not be
standing here and— nor would be the 16
ministers of this alliance who have
gathered here in Washington to have
our yearly conclave, where, I must say,
we had an excellent, excellent exchange
of views.

The fact that your Secretary of
State, Mr. George Shultz, and Mr.
Casper Weinberger, the Secretary of
Defense, are among your guests, as well
as so many distinguished people, whom I
have known — some of whom for a long
time, and some who have become per-
sonal friends of mine — and I look at
Tapley Bennett, who is now an Assist-
ant Secretary of the State Department
[former U.S. Ambassador to NATO],
and so many others I could
name -makes, of course, this evening
even more special than it is. Mr. Presi-
dent.

I could go on telling you, the guests
here and the ministers of the alliance,
that we have gone through somewhat
difficult times and that we have gone
through very good times.

Let me say that if I had left this
alliance last year, this time, I would be
less confident, less optistimic. But the
fact that the United Kingdom, the
Federal Republic of Germany, and Italy
have started to station on their territory
the modernized missiles in order to
counter the set of the SS-20s and,
thereby, restoring the credibility of our
nuclear details. And on that credibility,
Mr. President — you have said it often
and I repeat it— the peace of this world
rests. And the President l'honneur Mon-
sieur Cheysson, said it yesterday and

has repeated it today. I, therefore,
repeat, I go with a certain optimism.

I am not pretending that I am
deliriously happy to lay down my job as
Secretary General. [Laughter] If I were
to say what I feel, I would say, I am
somewhat content. [Laughter] That is,
perhaps, already an overstatement. But
let me say that all the various positions I
have held in life — like Secretary of State
of the Netherlands, and I was for 14
years a diplomat — the most rewarding,
the most rich position, rich in achieve-
ment, and important in what the alliance
has done, has been that I was chosen in
1971 to serve this great alliance, the
greatest, the most important alliance
and organization for peace the world has
known. And you are quite right, Mr.
President, that the peace has been
preserved for a far longer period, cer-
tainly in Europe, than we could have
hoped for in the days after the last war.

May I end by saying that we are all
deeply grateful for your unflinching sup-
port for the alliance. You have shown it
over and over again. And let me say,
too, that I will always treasure this very
special award, which I will, for the days
which will still be with me, I hope,
always see as one of the most important
and the most precious awards which was
ever bestowed on me. Thank you very
much, Mr. President. All the best to you
and to that great nation, the United
States of America.

Jly 1984

PRESIDENT'S REMARKS,
MAY 31, 19844

It has been a pleasure and an honor to
welcome the ministers of the North
Atlantic Council to the White House.
And I'm so pleased that the United
States is hosting this meeting because
we're also celebrating the 35th anniver-
sary of the signing in Washington of the
North Atlantic Treaty.

Last night at dinner and again this
morning, we had the opportunity to
discuss the major challenges facing tin1
alliance, including the security and
defense of the West, relations with the
Soviet Union, and arms control.

We all recognize that there is no
more important consideration than the
development of a better working rela-
tionship with the Soviet Union — one
marked by greater cooperation and
understanding and leading to stable,

secure, and peaceful relations. This has
been and will continue to be a primary
goal of the United States and the NATO
alliance. The alliance is dedicated to
peace. And thanks to the courage and
vision of our member nations and their
leaders, we can reflect on the past with
pride and look to the future with con-
fidence.

For us, our NATO partnership is an
anchor, a fixed point in a turbulent
world. And it's our sincere hope that the
Soviet Union will soon come to under-
stand the profound desire for peace
which inspires us. And I hope that the
Soviet leadership will finally realize it is
pointless to continue its efforts to divide
the alliance. We will not be split. We
will not be intimidated. The West will
defend democracy and individual liberty.
And the West will protect the peace.

At the same time, we remain ready
to negotiate fairly and flexibly ami
without preconditions. It is our hope
that the Soviet Union will soon return to

President Reagan meets with Secretary
(Jeneral Luns and the NATO Foreign
Ministers in the Cabinet Room at the
White House on Mav 31, 1984.

h
It

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i(|
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itl

the negotiating table. Our commitment
to dialogue and arms reduction is firm
and unshaken. No other step in the nea «
term would do so much for the cause of
peace and stability as a return to con-
structive negotiations and agreements
reducing the levels of nuclear arms.

I've said many times and will say
again that when the Soviet Union
returns to the negotiating table, we'll
meet them halfway. I also hope that th<
Soviet leadership will respond positively
to the range of proposals which we and
our allies have advanced in other areas
of arms control.

Our proposals serve the cause of
peace: the draft treaty to abolish
chemical weapons presented by Vice
President Bush in Geneva, the recent

m
Diet

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Mil :
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■'*■-:

Department of State Bullet

FEATURE

NATO Ministerial

NATO proposal seeking to break the
deadlock in the conventional force talks
in Vienna, and the measures introduced
by NATO in Stockholm in our effort to
reduce the risk of surprise attack in
Europe.

Tomorrow I will leave for Europe.
I'm looking forward to the trip and the
opportunity to underscore the enduring
importance of the political, cultural, and
economic ties that bind the industrial
democracies.

The meeting of NATO Foreign
Ministers has reinforced my own con-
fidence in the strength and durability of
the alliance and the common destiny of
free societies. And, so, I want to thank
all these NATO ministers. We're pleased
to have had all of you with us as our
guests and proud to have you as our
partners.

FINAL COMMUNIQUE,
MAY 31, 19845

The North Atlantic Council met in Ministerial
Session in Washington, D.C., on 29th, 30th
und 31st May, 1984. Ministers agreed as
ollows:

1. The North Atlantic Treaty, signed in
Vashington on 4th April, 1949, continues to
ulfill the expectations of the Allies. It is a
najor factor for peace and stability in an era

I 'f world-wide change and numerous conflicts.

I ''he strength of the Alliance and the solidari-
y born of shared values and reinforced by
he practice of consultation between its
overeign member states have secured peace
i the Treaty area and the freedom of its

leoples.

2. The Atlantic Alliance is a defensive
I dliance. None of its weapons will ever be

I sed except in response to attack. The firm
| dherence of members of the Alliance to their
ommitments under the North Atlantic

reaty, the United Nations Charter and the
lelsinki Final Act contributes to the
laintenance of peace and to the strengthen-
ig of international law. Faced with the con-
inued expansion of Soviet military strength
eyond reasonable defence needs, the Allies
re determined to safeguard their legitimate
ecurity interests. They look to the Soviet

nion to respect these as the Allies respect
ne legitimate security interests of the Soviet
Inion.

Without seeking superiority, the Allies

ill maintain the conventional and nuclear
circes necessary to deter and defend against
ggression and to resist attempts at intimida-

te of the Atlantic community are the single most effec-
tive obstacle between tyranny and its desire to dominate the
world. Our historic bonds of friendship have been
strengthened by common values and a common goal— the
creation of a world where free men can live at peace and in
dignity, liberated from the bonds of hunger, poverty, and
ignorance.

President Kennedy
February 15, 1961

tion. To this end they will continue to seek
more effective and balanced transatlantic ar-
maments co-operation, bearing in mind the
need for efficiency, economy of costs and ex-
ploiting and sharing of emergency
technologies.

3. Ministers took note of the thorough
appraisal called for at their last meeting with
a view to achieving a more constructive East-
West dialogue. They issued the "Washington
Statement on East- West Relations." They
reaffirmed their continued intention to work
for genuine detente through building up more
contacts and co-operation with the Soviet
Union and the countries of Eastern Europe,
while maintaining effective defence and firm
political resolve. The aim of the Allies re-
mains the establishment of a stable, long-
term relationship based on mutual trust and
understanding, and on respect for sovereign-
ty, self-determination and human rights.
They do not accept the Soviet view that con-
frontation between the social systems of East
and West is inescapable. All states should
work resolutely to realise the hopes of the
peoples of the world for peace and progress,
and to dissipate the common fears of war and
misery.

4. Both the achievement of balanced
arms control agreements and the restoration
of confidence in East-West relations would
reduce the risks of conflict and provide an en-
during basis for peaceful progress.

5. The members of the Alliance are com-
mitted to ensure security by a balance of
forces at the lowest possible level. In con-
sultation with the Allies concerned, the
Government of the United States has made a
comprehensive series of proposals in the In-
termediate Nuclear Forces (INF) and the
Strategic Arms Reduction Talks (START) at
Geneva for substantial reductions leading to
arms control agreements which would be
balanced, equitable and verifiable. The Allies
concerned have offered to halt, reverse or
modify deployments of US-INF— including
the removal and dismantling of missiles
already deployed to Europe — on the basis of

concrete results at the negotiating table.
They call upon the Soviet Union to resume
negotiations on nuclear forces without
preconditions or delay. In the absence of con-
crete negotiated results, longer-range INF
missiles are being deployed in accordance
with the December 1979 decision, all parts of
which are of equal importance.

6. The policy of the Alliance is to main-
tain nuclear weapons at the lowest level
possible for effective deterrence. The Allies
concerned withdrew 1,000 nuclear weapons
from Western Europe in 1980 and will over
the next few years withdraw another 1,400,
as well as one weapon for every Pershing II
and cruise missile deployed. The resulting
stockpile will be the lowest in Europe for
some 20 years.

7. In the Conference on Disarmament
the Allies continue to seek balanced, realistic
and verifiable disarmament measures. They
welcome the contributions made by several
Allies, in particular the comprehensive draft
treaty submitted by the United States for a
worldwide verifiable ban on the production,
stockpiling and use of chemical weapons. The
Conference on Disarmament is the forum
where an effective ban on chemical weapons
can be negotiated, and the Allies will work
seriously to that end.

The Allies remain gravely concerned
about strong evidence of the use of chemical
weapons in South-East Asia and Afghanistan,
in violation of international law, and of Soviet
involvement in the use of such weapons. With
regard to recent developments in the conflict
between Iran and Iraq, they reiterate their
categorical condemnation of any use of these
weapons.6

The Allies have also proposed that the
Conference on Disarmament identify, in the
first instance, through substantive examina-
tion, issues relevant to the prevention of an
arms race in outer space. They regret that so
far the Soviet Union and the Eastern coun-
tries have opposed the establishment of the
appropriate working group.

Uly 1984

The Allies welcomed the willingness of
the United States to discuss with the Soviet
Union research programmes on strategic
defence.

8. The Allies participating in the Mutual
and Balanced Force Reductions (MBFR)
talks, in accordance with their commitment
to these negotiations and following a review
decided upon by Ministers at their meeting
last December, have tabled a major new pro-
posal in Vienna. This proposal seeks to
resolve some of the most basic issues of these
negotiations, in particular on the long-
standing question of obtaining a satisfactory
data base, and offers a new approach to the
reductions and limitations process. If the
East is prepared to match the flexibility
demonstrated by the West in the new ini-
tiative, it will be possible for real progress to
be made towards an MBFR agreement that
provides for substantial, verifiable reductions
of personnel to equal collective levels of
ground forces and parity of combined ground
and air forces in Central Europe.

9. The Helsinki Final Act and the Madrid
Concluding Document are foundations on
which to build constructive relations. The
Allies reaffirm their commitment to the full
and effective implementation by all states
participating in the process initiated by the
Conference on Security and Co-operation in
Europe (CSCE) of the principles which par-
ticipating states have undertaken to respect
in their relations with each other. All prin-
ciples and provisions agreed in Helsinki and
Madrid, including those concerning relations
between states, human rights and contracts
between individuals, must be implemented.
The Allies are especially concerned over
disregard, in particular by the Soviet Union,
of the humanitarian provisions, which affects
not only internationally known personalities
but also a great many others.

In the continuing CSCE process the
members of the Alliance will pursue efforts
to conduct an in-depth dialogue and develop
co-operation between all participating states.

At the Conference on Confidence and
Security Building Measures and Disarmament
in Europe (CDE) in Stockholm the Allies at
the outset tabled concrete proposals in con-
formity with the mandate agreed at the
Madrid CSCE Follow-up Conference. These
proposals call for an agreement on measures
designed to build confidence and increase
security through openness about armed
forces and military activities throughout the
whole of Europe so as to reduce the risk of
miscalculation or the possibility of surprise
attack. In order to give further effect and ex-
pression to the existing duty of all par-
ticipating states to refrain from the threat or
use of force in their mutual relations, agree-
ment would be necessary on the above con-
crete measures in accordance with the
Madrid mandate.

French Foreign Minister Cheysson, NATO Secretary General Luns, Secretary Shultz, and
Vice President Bush.

10. The situation in Poland and in par-
ticular the recent increase in the number of
political prisoners continues to give cause for
serious concern. The Allies call upon the
Polish authorities to respect the aspirations
of the people for reform and dialogue and to
abide by the commitments in the Helsinki
Final Act and the Madrid Concluding Docu-
ment, particularly with regard to trade union
freedom and human rights. The Allies remain
ready to respond to steps which create the
opportunity for constructive political and
economic relations with the West.

11. The Allies condemn the massive
devastation and suffering inflicted on the
civilian population by the Soviet military
presence in Afghanistan. Increasingly severe
attacks such as the latest assault on Panjshir
suggest the Soviet Union is stepping up its
brutal campaign. This is in violation of fun-
damental principles of international law, the
United Nations Charter and the Helsinki
Final Act and in flagrant defiance of
repeated calls by the United Nations General
Assembly for the immediate withdrawal of
foreign troops, the restoration of
Afghanistan's independence and non aligned
status, self-determination for the Afghan peo-
ple and the voluntary return of refugees to
their homes in safety and honour. It is for
the Soviet Union t<> honour its obligations
under the United Nations Charter, to
withdraw its troops immediately and to allow
the Afghan people to determine their own
future.

12. The niaintenanci n nation
in and around Berlin, including unimpeded
traffic on all the access routes to the city re-

mains of fundamental importance for East-
West relations. The Allies welcome the ef-
forts of the Federal Republic of Germany to
strengthen Berlin's economy.

They also express the hope that the con-
tinuation of the Federal Government's
dialogue with the GDR, together with its ef-
forts to achieve further practical progress in
inner-German relations and in improvements
for travel in both directions, will directly
benefit Berlin and the Germans in both
states.

13. Trade conducted on the basis of com-
mercially sound terms and mutual advantage
that avoids preferential treatment of the
Soviet Union, contributes to constructive
East-West relations. At the same time,
bilateral economic relations with the Soviet
Union and the countries of Eastern Europe
must remain consistent with broad Allied
security concerns. These include avoiding
dependence on the Soviet Union, or con-
tributing to Soviet military capabilities. Thus
development of Western energy resources
should be encouraged. In order to avoid fur-
ther use by the Soviet Union of some forms
of trade to enhance its military strength, the
Allies will remain vigilant in their continuing
review of the security aspects of East-West
economic relations. This work will assist
Allied governments in the conduct of their
policies in this field.

14. The Alliance, which respects the
sovereignty and legitimate interests of all
states, works for peace, security and develop
ment. Its member countries seek to expand
economic and cultural relations with all coun
tries and are committed to give assistance tc

Department of State Bulletli

pre

■

(fr,

FEATURE

NATO Ministerial

developing nations, believing these policies
are mutually beneficial and contribute to
peaceful evolution. They consider respect for
genuine non-alignment by all states an impor-
tant contribution to international stability.

The Allies recognise that events outside
the Treaty area may affect their common in-
terests as members of the Alliance. They will
engage in timely consultations on such
events, if it is established that their common
interests are involved. Sufficient military
capabilities must be assured in the Treaty
area to maintain an adequate defence
oosture. Allies who are in a position to do so
ivill endeavour to support those sovereign na-
;ions who request assistance in countering
hreats to their security and independence.
Those Allies in a position to facilitate the
leployment of forces outside the Treaty area
nay do so, on the basis of national decision.

15. The Allies recall their commitment
inder Article 2 of the North Atlantic Treaty
.nd reaffirm the importance of programmes
ntended to benefit the economies of less
avoured partners who need aid for develop-
ment.

16. The Allies remain seriously con-
erned about acts of international terrorism,
n accordance with the relevant provision of
ne Bonn Declaration, they reiterate their
etermination to take effective measures for
ie prevention and suppression of such
riminal acts, which are a threat to the
emocratic institutions they are pledged to
efend, to stability and to the conduct of in-
;rnational relations.

17. The next regular meeting of the
orth Atlantic Council in Ministerial Session
ill be held in Brussels in December 1984.

As on previous occasions, the Spanish
inister of Foreign Affairs reserved his
overnor's position on the present Communi-
ae.

Denmark and Greece reserve their posi-
Dns on the INF part of this Communique.

The Foreign Ministers paid tribute to the
•parting Secretary General of the North
tlantic Treaty Organization, Dr. Joseph
jns, who is retiring after devoting a major
irtion of his professional life to upholding
estern security through the Alliance. Dur-
g his thirteen years as Secretary General,

Luns has made uniquely important con-
ibutions to co-operation among individual
Hies and to the cause of Allied unity. The
jreign Ministers expressed their profound
preciation of Dr. Luns' outstanding serv-
es to the Alliance and to the cause of peace
d freedom.

What is our view of NATO today? We see it not as an
alliance to make war but as an alliance to keep peace. . . .
While NATO rests on the reality that we must fight together
if war should come to the Atlantic area, it rests also on the
reality that war will not come if we act together during
peace.

President Johnson
March 23, 1966

ANNEX TO

FINAL COMMUNIQUE7

In addition to the Communique, the Foreign
Ministers decided to publish the following ex-
tracts from the Minutes of their Meeting on
29th, 30th, and 31st May, 1984.

Armaments Co-operation

Ministers examined the report by the Con-
ference of National Armaments Directors
(CNAD). They noted steps taken to improve
CNAD armaments planning procedures, and
to exploit emerging technologies in selected
high priority multinational equipment pro-
grammes whereby co-operative development
and procurement should be envisaged to the
maximum extent possible. They further noted
progress made by the CNAD in a number of
potential co-operative programmes, and
welcomed in particular the recent signature,
by all the parties concerned, of a Memoran-
dum of Understanding for the NATO Frigate
Replacement Study. Ministers reviewed fur-
ther progress achieved in the Transatlantic
Dialogue, which offered prospects for an
enhanced framework of transatlantic co-
operation. They reaffirmed the importance of
preventing the transfer of militarily relevant
technology to the Warsaw Pact countries.

Economic Co-operation and
Assistance Within the Alliance

Regretting the persistent differences be-
tween the various member countries of the
Alliance in their standard of living and aware
that its less prosperous member countries
suffer much more from the continuing world
economic difficulties than the rest of the
Alliance, Ministers took note of the Secretary
General's report on "Economic Co-operation
and Assistance Within the Alliance" which
calls upon the more prosperous members to
take better account of the development needs
of Portugal, Turkey and Greece.

ily 1984

NATO Science Programme

Ministers noted with satisfaction the progress
of the "Science for Stability" Programme
aimed at mobilizing the human and institu-
tional resources of Greece, Portugal and
Turkey on advanced technological projects of
economic relevance. This Programme, jointly
funded since 1981 by NATO and the three
countries concerned, has already achieved
some significant results. A review of the Pro-
gramme's future and possible follow-on will
be considered in 1985.

The Situation in the Mediterranean

Ministers noted the report on the situation in
the Mediterranean. In view of the actual and
potential impact on Alliance security of
events in the area, they requested the Coun-
cil in Permanent Session to continue to con-
sult on the question and to submit further
reports at their future meetings.

WASHINGTON STATEMENT
ON EAST-WEST RELATIONS,
MAY 31, 19848

1. At their meeting in December 1983 the
Ministers of Foreign Affairs of the member
countries of the Alliance, on the initiative of
the Foreign Minister of Belgium, decided that
the Council should undertake an appraisal of
East- West relations with a view to achieving
a more constructive East- West dialogue.

2. The appraisal has confirmed the con-
tinuing validity of the balanced approach con-
tained in the Harmel Report of 1967. To en-
sure the security of members of the Alliance,
the most appropriate long-term policies are
the maintenance of adequate military
strength and political solidarity and, on that
basis, the pursuit of a more stable relation-
ship between the countries of East and West
through dialogue and co-operation. These

fTml

Foreign Ministers (left to right):
Giulio Andreotti (Italy)
Geir Hallgrimsson (Iceland)
Ioannis Haralambopoulos (Greece)
Hans-Dietrich Genscher (West Germany)
Uffe Ellemann-Jensen (Denmark)

elements are complementary; dialogue can
only be fruitful if each party is confident of
its security and is prepared to respect the
legitimate interests of others: military
strength alone cannot guarantee a peaceful
future. Experience points to the continuing
need for full, consistent and realistic im-
plementation of the two main tasks of the
Alliance set out in the Harmel Report.

3. In pursuit of this approach the Allies
sought to alleviate sources of tension and to
create a propitious climate for expanded co-
operation. Steps such as the Berlin
Quadripartite Agreement, improvements in
relations between the two German states
with positive results for individuals, the
Strategic Arms Limitation Talks (SALT) I ac-
cords including the Anti-Ballistic Missile
Treaty and the Final Act of the Conference
on Security and Co-operation in Europe
(CSCE) were the fruits of this policy.
However, progress towards the expansion of
human contacts and human freedoms remains
unsatisfactory. Individuals have nonetheless
benefitted from increased opportunities for
contacts and communication.

4. At the same time, the Soviet Union
engaged in a massive military build-up. This
poses a continuing threat to Alliance security
and vital Western interests. The Soviet

I i i has sought to exploit any apparent

Allan J. MacEachen (Canada)
Leo Tindemans (Belgium)
Claude Cheysson (France)
Secretary General Joseph M.A.H.
George P. Shultz (U.S.)
Sir Geoffrey Howe (U.K.)

Luns

weakness which it has perceived on the part
of the Alliance. Further, Allied restraint has
not been met with reciprocal restraint by the
Soviets. Instead they have pursued a
relentless campaign to breach the solidarity
of the Alliance. Soviet willingness to threaten
or use military power for political ends has
been exemplified most notably in the invasion
of Afghanistan and pressure on Poland.9

5. Notwithstanding continuing fundamen-
tal differences between countries in East and
West, the Allies remain convinced that there
exist areas where common interests should
prevail. These include the need to safeguard
peace, to build confidence, to increase securi-
ty, to improve mechanisms for dealing with
crises, and to promote prosperity. To this
end, the Allies remain determined to build
upon these and other areas of common in-
terest in pursuing their efforts to promote
more constructive dialogue and co-operation
with the members of the Warsaw Pact with a
view to achieving genuine detente.

6. The Allies support the continuation
and strengthening of the CSCE process
which represents an important means of pro-
moting stable and constructive East-West
relations on a long-term basis. They insist on
the implementation of the Helsinki Final Act
and the Madrid concluding document in all
their parts. While important agreements have

Vahit Halefoglu (Turkey)

Fernando Moran Lopez (Spain)

Jaime Gama (Portugal)

Svenn Stray (Norway)

Hans van den Broek (Netherlands)

Colette Flesch (Luxembourg)

•

been reached within the CSCE framework,
much remains to be done. Any improvement
in East-West relations would be incomplete if
individuals were not able to benefit from
greater respect for human rights and in-
creased human contacts.

7. The Allies will continue to be guided
by the awareness of a common history and
traditions of all European peoples. Given the
continuing division in Europe and particularly
Germany, the Alliance continues to support
the political aim of the Federal Republic of
Germany to work towards a state of peace in
Europe in which the German people regains
its unity through free self-determination.

8. Neither side must seek unilateral ad-
vantage, military superiority or dominance
over other states. Mutual respect for each
other's security on the basis of equality of
rights, non-use of forces as called for in the
United Nations Charter and other current in-
ternational agreements, restraint, and
respect for international rules of conduct are
essential for strengthening confidence and co
operation

9. The Allies respect the sovereignty and
independence of states everywhere and genu-
ine non-alignment. This is reflected in their
political, economic and aid relations with

Be
■■
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IB
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I"-' i

Were
(in

other countries. Responsible Soviet behaviotu '.

Department of State Bulletir

FEATURE

NATO Ministerial

world-wide would be an important contribu-
tion to a durable improvement in East- West
relations.

10. The Allies recognise that, as
members of the Alliance, their vital security
interests can be affected by developments
outside the Treaty area. They will engage in
timely consultations on such developments.
They underline the responsibility of all states
to prevent the transfer of East-West dif-
ferences to the regions of the Third World.
They would like to see the benefits of peace,
stability, human rights and freedom from in-
terference which they themselves have en-
joyed for over 35 years secured in other
areas of the world as well.

11. On a basis of unity of purpose and
issured security, the Allies reaffirm their of-
'ers to improve East-West relations, made
■nost recently in the Declaration of Brussels
)f 9th December 1983. They propose that
jarticular efforts be devoted to the following:

(a) dialogue, co-operation and contacts at
ill levels on the full range of questions be-
ween East and West— including political and
ecurity problems, human rights and bilateral
natters— aimed at mutual understanding,
dentifying common interests, clarifying ob-
ectives, expanding areas of agreement and
•esolving or isolating areas of disagreement;

(b) mutually advantageous trade and
conomic co-operation with Warsaw Pact
■nembers on commercially sound terms which
>re consistent with Allies' broad security con-
<erns, which include avoidance of con-
-ibuting to Soviet military strength;

(c) achieving security at the lowest possi-
<le level of forces through balanced, equitable
nd verifiable agreements on concrete arms
jntrol, disarmament and confidence building
leasures.

To these ends, the Allies concerned will
mtinue in particular:

(i) to emphasize the readiness of the
nited States to resume bilateral negotia-
ons on Intermediate-Range Nuclear Forces
~ ~F) and Strategic Arms Reductions
TART) with the Soviet Union at any time
ithout preconditions and to call on the
oviet Union to return to the negotiating
ible;10

(ii) to work for progress at the Mutual
id Balanced Force Reductions (MBFR)
jgotiations where they have recently made
?w proposals to break the impasse on con-
mtional force reductions;

(iii) to urge the world-wide elimination of
lemical weapons which is the objective of
te United States draft Treaty tabled at the
onference on Disarmament;

(iv) to press at the Stockholm Conference
DE) for agreement on concrete measures,
: proposed by the Allies, designed to build
mfidence and ensure the openness of
ilitary activities in the whole of Europe,

Jly 1984

. . . we must build an alliance strong enough to deter
those who might threaten war, close enough to provide for
continuous and far-reaching consultation, trusting enough
to accept the diversitg of views, realistic enough to deal
with the world as it is, and flexible enough to explore new
channels of constructive cooperation.

President Nixon
April 10, 1969

thus reducing the risk of surprise attack and
the threat of war. In order to give further ef-
fect and expression to the existing duty of all
participating states to refrain from the threat
or use of force in their mutual relations,
agreement would be necessary on the above
concrete measures in accordance with the
Madrid mandate.

12. The purpose of the Alliance is ex-
clusively defensive; none of its weapons will
ever be used except in response to attack.
The Alliance does not aspire to superiority,
but seeks a stable balance of forces. Defence
and arms control are integral parts of the
security policy of the Alliance. The legitimate
security interests of all countries must be
respected on a reciprocal basis. The cohesion
and security of the Alliance, based on a firm
linkage between its European and North
American members, and reinforced by close
consultations, remain the foundation for the
protection of their common interests and
values. In the course of carrying out their ap-
praisals, the Allies have confirmed their con-
sensus on the conduct of East- West relations
and their commitment to a constructive East-
West dialogue.

13. Peace and stability require a united
effort: the Allies look to the Soviet Union
and the other Warsaw Pact countries to join
in an endeavour which would be of benefit to
the world at large. The Allies are prepared to
do their part and are ready to examine any
reasonable proposal. A long-term, construc-
tive and realistic relationship can then be
brought about.

SECRETARY SHULTZ'S
NEWS CONFERENCE,
MAY 31, 198411

We just finished a meeting of immense
significance, significance for the cause of
peace and for the value of freedom.

We met at a time when, once again,
the Soviet Union seems to have decided
on a policy of chilling its relations with
the West, so it is a time of some testing.
The meeting reviewed, among other
things, an extensive study of East- West
relations that was called for in our
meeting in Brussels last December and
approved the report and issued a com-
munique and statement on East-West
relations that reflects it and reflects the
continued view of the alliance that the
cause of freedom and peace is served by
a set of policies that involved, first of
all, strength on our part; second,
political solidarity; and building on those
fundamentals a continued willingness to
undertake a constructive dialogue with
the Soviet Union and the countries of
Eastern Europe.

There was, throughout our meeting,
a very free and full and interesting ex-
change of ideas, and a sort of quiet con-
fidence that the alliance for 35 years has
been basically on the right track, and
that track remains the right one. It
represents a strategy and a set of ac-
tions that have worked. As they are con-
tinually adapted to the new circum-
stances, we'll continue in the future to
serve the causes of peace and freedom.

Q. The Washington declaration,
which we have just had a chance to
see, states that the allies are deter-
mined to build on areas of common in-
terests in promoting constructive
dialogue and cooperation. What areas
are there of common interests at the
moment in which the allies and the
Soviet Union can engage in construc-
tive dialogue and cooperation,
understanding that the nuclear
weapons talks, the INF, talks are not
among them?

A. Of course, first of all, there is the
general clause of peace which we
assume everyone is interested in. And
then there are various ways of going
about assurance of that through negotia-
tions, and there is quite a list. You men-
tioned the INF talks, and the START
talks are in the list; it's in the statement.
The discussions going on in Stockholm
are another forum in which we are ad-
dressing these issues. There are discus-
sions in Geneva, particularly on chemical
weapons. There are discussions in Vien-
na on conventional forces.

So there is an wide array of areas in
which these discussions are going for-
ward, and presumably the fact that
everyone is represented there shows
that there is some common interest.
Beyond that, of course, there are com-
mon interests in economic development,
and particularly poignantly for many of
the countries— Germany especially— the
common interest in seeing such things
as contacts among families and the
human touch so much wanted in a
divided nation.

Q. Given the fact that the Soviets
are not terribly interested in relations
right now, what is your personal
evaluation of why that is so?

A. It's no doubt a part of their
negotiating strategy, a tactical adaption.
At least, that is my general view. But
it's not so important for me to speculate
about exactly why they are doing what
they're doing as it is to say, what should
we be doing. We feel that what we
should be doing, not only the United
States but the alliance, is looking to our
security and deterrent capabilities, in
sharing our thoughts, and being sure
that we do have the political solidarity
that is so essential and continuing to
reaffirm and to try to implement the
dialogue that we would like to see.

Secretary Shultz holds a news conference at the Department of State on May 31, 1984.
With him are U.S. Ambassador to NATO David Abshire (left) and Department spokesman
and Assistant Secretary for Public Affairs John Hughes (right).

Of course, we are not just looking
for dialogue. We are looking for
dialogue about important subjects and in
a reasonable way.

Q. Do you expect, on the basis of
your conversations with the Dutch
Foreign Minister, that the Dutch
Government will agree to proceed
with INF deployments according to
the original schedule?

A. The Dutch Government is having
its difficulties, as we all know. The
Dutch Foreign Minister was very strong
in his views, and I believe he expressed
himself before he left last night to go
back. And I understand there is a Dutch
Cabinet meeting tomorrow, probably on
this subject. But they are struggling to
find a way of behaving that is consistent
with their responsibilities in the alliance
and meets the political realities that
they're facing in Holland. But we have
every confidence that the Dutch will
play a proper part in the alliance ac-
tivities.

Q. We've seen some reports of dif-
ferences among the allies on the Per-
sian Gulf question, the security ques-
tion in the Persian Gulf. Could you ad-
dress the question of whether it is
desirable or even obtainable for there
to be cooperation, any kind of joint ac-
tion among the allies to provide
greater security in the gulf?

A. There wasn't any particular ex-
pression of difference of opinion at all.

We discussed the subject in our informal
session for— I don't know— 20 minutes
or so and shared information and
thoughts about it.

I think it is important to understand
that NATO has a certain set of respon-
sibilities. And, obviously, there are
things that are in the parlance of NATO
out-of-area that have an impact on all
the countries concerned. After we have
finished what you might call the more
direct NATO discussions, we try to find
time for discussing these out-of-area
problems, and the gulf situation was ona
of them. I don't think that it is ap-
propriate to expect that NATO, as an
alliance, would take a view or undertake
something. But the different countries ir
the alliance, as countries, have an in-
terest. We have discussed it during this
meeting, but we've discussed it before;
more with some countries than others.
There are many ways in which the col-
laboration goes forward and, of course,
including the countries in the gulf, as
such, beyond NATO countries.

Q. In the past, NATO was usually
flanked by two other Western
alliances-CENTO [Central Treaty
Organization] and SEATO [South Eas
Asia Treaty Organization], Do you
believe that NATO is able now to
operate in the area of CENTO as
before, like when CENTO was there?

A. You have too many initials and
ideas going tor me. But I think that the
point is that the NATO alliance was set!

Department of State Bulleti

FEATURE
NATO Ministerial

up for certain very important and cen-
tral purposes to our lives. It has suc-
ceeded brilliantly and continues to work
along the same basic principles that
have worked so well, adapting them,
studying them as we go along. I think,
obviously, the different countries, in
various ways, have relationships and
alliances with other countries around the
world, but these are important and
they're related. But the NATO meeting,
as such, concentrates on the NATO ac-
tivities.

Q. I would like to draw you out a
little further on this question of what
you think impels the Soviet Union now
in its colder and harder line. You gave
a personal opinion that you thought
that perhaps this was a part of a new
negotiating strategy. To achieve
specifically what objectives?

A. I don't think I want to get drawn
n too much into negotiating strategy
ind speculation about the Soviet Union.
3ut they have stated objectives on one
•ccasion or another broadly. And then,
nore particularly, they have negotiating
>ositions at the table, and so do we.
Vhat we want to do is continue to
•ngage them and try to work out a
■■easonable solution.

As the President said this morning,
n his statement at the White House, the
Jnited States is ready to meet them half
vay. I think that is the main point to
mphasize. And, of course, in many of
he fora, we are very active. We have
■JATO proposals on the table in
Itockholm. We have just tabled — the
'ice President made a trip to Geneva to
able a draft treaty on chemical warfare.
Ve have made a proposal recently on
he MBFR talks. So there is a very ac-
ive negotiation taking place, and I don't
articularly want to characterize the
articular positions within it.

Q. You said there are many ways
i which collaboration goes forward
mong the allies on the Persian Gulf,
erhaps in a bilateral way. How is
hat, in fact, happening, particularly
gainst the background of the United
tates arming the Saudis, the French
rming Iraq, and the United States
oping that nobody would send arms
d either of the adversaries, Iraq and
ran?

A. There are many ebbs and flows in
lis. But there are discussions that take
lace among countries that are able to

The United States of America, unconditionally and un-
equivocally, remains true to the commitments undertaken
when we siyned the North Atlantic Treaty . . . [they] are
strategically sound, politically essential, and morally
justifiable. . . .

President Ford
May 29, 1975

have military assets in the region as a
deterrent matter.

We have responded to requests from
Saudi Arabia, and I believe some other
countries have as well. There is a
diplomatic effort going on in the United
Nations in which we and others are very
active, and we discuss with them their
positions and our positions. And there
are efforts being made with Iran and
Iraq, not by us directly since our rela-
tionship with others have better relation-
ships with the two countries than we do,
although we do talk to Iraq. And so
there are a great many things that are
taking place.

Unfortunately, the war goes on, and
there are continued threats to its escala-
tion in the gulf. It seems a problem that
we will be coping with, so we need to be
widely consultative with others in
evaluating our own efforts to do so.

Q. Reportedly, Turkey is the only
NATO country which has a dialogue, a
direct dialogue, with Iran. The
Turkish Foreign Minister gave the
view that the Western side should not
put too much pressure only on Iran
but be more even-handed. What was
your reaction on that?

A. First of all, I don't want to speak
for the Foreign Minister of Turkey. He
will speak for himself.

I would say that he made very in-
teresting contributions throughout our
meeting and is an experienced and wise
person. So he is most welcome in the
NATO councils. And not the least of the
virtues of it is, as you point out, Turkey
does have a good relationship with Iran
and is able to talk with them.

As far as the United States is con-
cerned, our posture on the war is one of
neutrality. Our posture in regard to the
openness of international waters is one
of believing that these waters must re-

main open. And we have stated that and
have worked for it diplomatically, in sup-
port of people in the region, and directly
ourselves.

Q. Do you believe that Turkey will
be with the Western powers if there
will be a military intervention in the
gulf?

A. As far as the NATO alliance is
concerned, I'm sure that Turkey is a
very firm member of the NATO alliance
and spoke in an interesting and
thoughtful way throughout on the out-
of-area questions. I'm not going to try to
go beyond that, except to say that the
Turkish attitude toward the issues that
we were discussing was very positive.

Q. In your view, what is the dif-
ference between the so-called signal
of Brussels and this Washington
declaration?

A. They are consistent with each
other and they both, broadly speaking,
take the same view.

At Brussels, an East- West study
was commissioned. That was undertaken
by NATO— a very careful, thoughtful
document produced, some 35 pages or
so, I think. From that careful evalua-
tion, the Washington statement that you
got was drawn and discussed, and it
basically elaborates and goes into more
detail and reaffirms.

I think beyond that, there is no
doubt about the fact that, obviously, this
is a continuing subject for the alliance,
and we will review, I'm sure, at each
meeting how the East- West situation
stands and what it is that we can do
about it. So I don't think it's so much
that's different. In fact, I think the
reverse is the important point: there is
continuity and reaffirmation and reaffir-
mation of a strategy that, basically, has
kept the peace for 35 years.

Jly 1984

Q. You have reviewed East-West
political relations. Do you think that
there is a necessity to look at NATO's
military strategy as well as its
political strategy? Do you see any
possibility for a review of that? And
would you see, for example, the need
to study removing battlefield nuclear
weapons and improving conventional
forces?

A. I think that in the NATO
strategic doctrine, the strategy of deter-
rence is central. We discussed that, and
I think there is no question about the
centrality of that nuclear deterrent
capability. At the same time, I think
everyone wishes to see the nuclear
threshold raised, and that does bring
you to conventional forces, and we
discussed that subject briefly. No doubt,
it's the sort of thing that is more ap-
propriately dealt with by Defense
Ministers but, at the same time, is a
matter of great interest to Foreign
Ministers. I wouldn't expect any drastic
shift at all but a continual effort to look
at this matter.

I think that soon as you utter the
words "conventional forces," you also ut-
ter the word "expensive," and everybody
has to recognize that going in.

Q. I wonder if you could give us
your analysis of the role that the
Soviet Union is currently playing in
the Persian Gulf crisis. We have
reports that they have recently sent
offensive weapons to the Iraqis. Do
you think they are trying to "steal the
march" on the United States in terms
of ingratiating themselves with the
Arabs? And do you see any circum-
stances under which the United States
and the Soviet Union could end up on
the opposite sides in a confrontation
in the gulf?

A. I think, no doubt, the Soviet
Union feels as we do, that openness of
international waterways is a very impor-
tant principle. Beyond that, of course,
we have discussed the situation, at least
trying to make clear to the Soviet Union
at various times what our view is, what
our intentions are, including the limita-
tions of our intentions so that they
wouldn't be under any misapprehension.

They have made statements about
our intentions that are incorrect, that is
that the United States is seeking to use
the crisis as a way of implanting itself
somehow more fully in the gulf

area — that certainly is wrong. And so
we have done those things, and beyond
that. I don't want to speculate about the
Soviet Union.

Q. What other out-of-area prob-
lems were discussed besides the Per-
sian Gulf, and in particular was Cen-
tral America discussed? And if so,
could you characterize those discus-
sions?

A. In truth, the discussion of East-
West relationships and the analysis of
the Soviet Union and of other Eastern
European countries was, at least speak-
ing for myself as a person who has now
attended quite a few NATO meetings,
more interesting and superior in quality
to anything that I have experienced. It
consumed most all of our time in the in-
formal sessions.

The only out-of-area subject that
was really formally discussed was the
gulf situation. I'm sure that Central
American problems are on peoples'
minds, and they would have like to have
discussed it, but we literally didn't have
time to do so. So I don't have any report
to make on that.

Q. Did any of the ministers renew
the European complaints about
technology transfer and about military
cooperation between the United States
and the allies, that is, in terms of the
United States being an unreliable sup-
plier or in terms of the two-way street
working more to the advantage of the
United States than to the allies?

A. There are two very different
issues — totally different issues — that
you've raised, at least as I understand

U.S. Ambassador to NATO

David M. Abshire was born April 11, 1926, in
Chattanooga, Trim. He graduated from the
U.S. Military Academy (1951) and
Georgetown I niversitj (Ph.D.. 1959).

He was formerly President of
Georgetown University Center for Strategic
and International Studies (CSIS), which he
helped found in 1962. He served as a member
of the President's Foreign Intelligence Ad-
visory Board and of the Long-Range Plan-
ning Advisory Board for the Chief of Naval
Operations. Previously, Ambassador Abshire
was chairman of the U.S. Board for Interna-
tional Broadcasting (1974-77), Assistant
Secretary of State for Congressional Rela-
tions (1970-73), Executive Director for CSIS
(1962-70), and Director of Special Projects at;
the American Enterprise Institute for Public
Policy Research (1960-62).

In 1978-81, he was Director and Vice
Chairman of the Board of Youth for
Understanding. He is a former member of
the Board of Advisors of the Naval War Col-
lege (1975-77) and was a member of the con-
gressional Committee on the Organization of
the Government for the Conduct of Foreign
Policy (1974-76).

Ambassador Abshire is a member of the
Council on Foreign Relations and is a direc-
tor of the Tinker Foundation of New York
and of the Atlantic Council of the United
States. He served on the board of the Na-
tional Park Foundation, lie was founder and
co-editor of 'I'lir Washington Quarterly and isr
the author of a number of books, including
The South Rejects n I'mplicl; Iiilt rntitiiitml
Broadcastiiir): A Xeu: Dinu ■iisimi of Western
Diplomacy; and Foreign Policy Makers:
President vs. ' 'ongress.

Ambassador Abshire was sworn in as the Jr.
U.S. Permanent Representative on the Coun- ij;j;
cil of the North Atlantic Treaty Organization ^
on July 15, 1983. ■

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Department of State Bulletin

FEATURE
NATO Ministerial

your question. One is the supplier rela-
tionship within NATO, and this is a sub-
ject that is sort of a perennial subject of
discussion. But I do have the feeling and
observation that some headway has been
made on it, particularly in the last 5 or 6
months. I know our new Ambassador to
NATO has gone there particularly hav-
ing this problem in mind and has put a
lot of effort into it personally. I think
that there is a better understanding and
also probably more action taking
place — there's been a lot of discussion
with the Pentagon about it. So that's
one side of your question, and I think
progress has been made. It didn't come
n for a lot of discussion, and perhaps
;hat is by way of saying that people
-ealize that progress is being made and
;hat the problem is getting attention.

As far as the question of technology
;ransfer is concerned, that's a totally dif-
'erent issue. The agreements that were
vorked out a year or so ago and started
>eing reflected in the communiques, I
hink, hold and are moving forward in
:heir implementation. On the whole, the
ituation there is reasonably satisfac-
ory.

No doubt there are differences of
iew about a particular piece of
echnology, and, of course, we have also
ieen liberalizing our view of technology
ransfer with respect to China, and this
; ias come up for discussion in COCOM

oordinating Committee for Multi-
ateral Security Export Controls]. And I
/ould be surprised if the Chinese
i'remier isn't talking about it to some of
ur European friends on his current
rip.

Q. You said you have every con-
idence that the Dutch will play their
roper part. Does that mean you
elieve them to deploy not on
chedule, but eventually?

A. I don't want to try to set out
arious things that they might do
ecause they are struggling with that
ecision. We've talked to the Prime
linister at one time or another and, of
ourse, the Foreign Minister, and I
pent a considerable amount of time
'ith him on this subject.

There are a variety of ideas in play,
ind just how the Dutch Government will
ome out on this remains to be seen. I
link the best thing for me to do at this
tage is to say no more.

uly 1984

. . . NATO has always been much more than just a
military pact. The spontaneous political development of the
alliance demonstrates that true security . . . flows from the
freely given support of the people and their willingness to
participate in the defense of common ideals.

President Carter
March 22, 1979

Q. With reference to the last
paragraph of the Point 11 of the state-
ment, I would like to ask: Is the
United States ready, at the Stockholm
conference, to formally reaffirm what
is called here "the existing duty of all
participating states to refrain from
the threat or use of force in their
mutual relations?"

A. Of course, this is a proposal
that's been made by the Soviet Union,
and so it's under consideration. We
believe that declarations of that kind
take on a great deal more meaning
when they have some real content to
them, along the lines of the confidence-
building measures that NATO has sug-
gested. So what we are seeking is to
have a discussion of all of these various
items, and we're working for that in
Stockholm. Prior to the outcome of that
work, I don't want to sort of lay down
some decision on one element or another
of it.

Q. At the last NATO meeting in
Brussels, there was considerable an-
ticipation about your session with Mr.
Gromkyo which took place then in
Stockholm. At this point, can you tell
us whether there is any forum in
which you might be able to meet with
Mr. Gromkyo over the next few
months? And do you expect to meet
with him when the UN General
Assembly meets in the fall?

A. Traditionally there has been a
meeting between the Secretary of State
and the Foreign Minister of the Soviet
Union on the occasion of the UN
meeting. That didn't happen last year
because Mr. Gromyko didn't come. As
far as we're concerned, we are certainly
prepared to have such a meeting, and I
would expect that it would probably take
place, but I can't speak for the Soviet
Union, obviously.

As far as a meeting between now
and then is concerned, it's always a
possibility, but there is no plan for it. If
there seemed to be a good reason to
have one, then it wouldn't be difficult to
arrange it. There isn't any plan for a
meeting, but I personally would welcome
a meeting in New York, but it hasn't
been formally laid on.

Q. You said that the quality of the
discussion on East-West affairs was
superior. I was wondering if you
might be willing to share some of the
insights that were offered in that
discussion with us. And related to
that is, are the ministers concerned
that the new Soviet hard line is having
an impact on Western public opinion?
If so, other than the declaration that
you have issued here today, what ap-
proach do you and other ministers
plan to take to that?

A. Taking the last part of your
question first, we all believe firmly that
we are on the right track, and that,
broadly speaking, the populations in the
West support what's being done and
have done so and reaffirmed and re-
affirmed and reaffirmed. At the same
time, everyone recognizes that critical
voices are raised and problems are
talked about. We're engaged in a con-
tinual debate, and that's well and
proper. So we have to give attention to
a constant process of explanation and
argumentation, and so on. So that's one
of the things, certainly, that motivated
the putting forward of the communique
each 6 months.

In this case, in view of the fact that
an extensive East- West study had been
made, of making a sort of declaration
based on it that states in detail the
strategy and philosophy involved, and
then goes through and identifies various

pluses and minuses and ways in which
we're prepared to move forward, and
lists the different forums, and so on. All
of this is part of the process of maintain-
ing the working life of the NATO
alliance. And in our kind of societies,
which are democratic societies, that's
the name of the game — explaining to
people what you're doing and seeing to
it that they are on your side.

The permanent representatives, I
hope, will be looking at this issue
especially: What is the public perception,
and in what ways can we enhance
understanding of what we're doing, and
so on? We expect that; Dave [David
Abshire, U.S. Ambassador to NATO],
you're going to have a report for us
when we meet the next time on this
very subject.

As far as illustrations of the discus-
sions are concerned, it's the sort of thing
that's a little hard to put your finger on,
but lots of discussion of Soviet behavior
and of the situation in different Eastern
European countries. Several have visited
the Soviet Union and described the
posture that was taken there and their
own observations about the people in-
volved.

Earlier someone asked a question
about the Turkish Foreign Minister. As
it emerges, he has served on three dif-
ferent occasions in Moscow as Am-
bassador there, which gives him a rather
interesting insight. So all of these things
together were part of our conversation.
Perhaps the outstanding thing about it
was that it was an easy, cordial, and
strong informal discussion where I cer-
tainly felt free, as did others, to try out

ideas and give information and share
them, not only in the general meetings
but in the informal settings that you find
yourself in.

Let me just say, winding up here,
once again that this has seemed to me to
be a very important occasion. It came at
a time of testing and importance, and
the alliance leaders came together — the
Foreign Ministers — and in a quiet, confi-
dent way reexamined and reaffirmed the
strategy that we have. I think we all left
feeling that the cohesion of the West
and the strength of the values that we
have that lies behind that cohesion is in
very good shape. And I think that's good
news for the cause of freedom and it's
good news for the cause of peace.

'Held at the Department of State.

2Text from the Vice President's Office of
the Press Secretary.

3Text from White House press release of
May 31, 1984.

4 Made in the White House Rose Garden
following a meeting with the NATO Foreign
Ministers (White House press release of
Mav 31).

sText from NATO press release M-l (84)
10.

6Greece recalled its position as it has
been expressed during previous ministerial
sessions [text in original).

'Extracts for publication from the
minutes of the ministerial meeting of the
council.

"Text from NATO press release M-l (84)
11.

'Greece and Spain reserve their positions
on this paragraph [text in original].

'"Greece reserves its position on this sub-
paragraph [text in original].

"Text from Department press release
144. ■

Secretary Shultz's
Interview for "Worldnet"

Secretary Shultz was interviewed on
May 24, 198k, by news correspondents in
Amsterdam, Ankara, Brussels,
Copenhagen, Lisbon, London, Luxem-
bourg, Madrid, Munich, Oslo, Ottawa,
Paris, and Reykjavik. The interview was
broadcast live on "Worldnet, " a satellite
TV program of the U.S. Information
Service. 1

To mark the 35th Anniversary of
NATO, we are broadcasting a special
2-hour program live from Washington
and Europe in one of the most ambitious
satellite hookups outside the Olympic
( lames.

It was in April of 1949 that the
North Atlantic Treaty was signed here
in Washington, and it was in September
of that year that the North Atlantic
Treaty Organization came into being. In

those 35 years since its founding, NATO
has been a remarkable force for peace
and stability and prosperity not only in
Europe but in other parts of the world
as well.

NATO has kept the balance and
preserved the peace. Today we'll be
looking not only at the past but also at
the present and the future. We will be
hearing about the state of the alliance,
its strengths and its weaknesses. Is it as
strong as it ought to be? Is Europe
carrying its fair share of the burden?
Above all, perhaps we should be asking,
will the alliance be in place and in good
shape, if needed, in the next century?

There are big questions and not easy
questions. To help us to examine them,
we have an expert panel here in
Washington: a Senator, a senior member
of the Department of Defense, and a
prominent European journalist. And in
Brussels, we have a second equally ex-
pert panel, this time made up of two
well-known European journalists and the
American Ambassador to NATO.

Then, very fortunately for us, we
have in the studio here in Washington
the U.S. Secretary of State, Mr. George
Shultz, whose predecessor. Dean
Acheson, was one of the signatories of
the original treaty in 1949.

Journalists from 14 NATO countries
linked to this studio by satellite will be
able to put questions to Mr. Shultz in a
minute or two.

But first, let's remind ourselves of
the history of the alliance. Although
NATO was founded in April 1949, it was
the events of the years immediately
before which brought the alliance into
existence.

The end of the Second World War
meant Europeans could finally return to
civilian life and the task of rebuilding.
Along with disarmament came a reduc-
tion in Allied Armed Forces from 5
million men to less than a million.

While the West wound down its war
machine, the Soviet Union maintained 6
million men in its armed forces. In its ef-
forts to extend Soviet influence, Stalin
turned his attention to southeast Europe
by arming guerrilla forces in Greece and
demanding the handover of Turkey's
northeastern provinces. Less than 1
year later, Soviet pressure moved north
when the Communist Party of

Department of State Bulletin

FEATURE

NATO Ministerial

n.«

Czechoslovakia gained control of the
government in Prague through a coup
d'etat.

Then on June 24, 1948, Stalin im-
posed a total railroad and canal blockade
on the former German capital. That left
only the British, French, and American
corridors open, and the allies responded
with a now-famous Berlin airlift, flying
in everything the Berliners needed to
stay alive and free.

In September 1948, Foreign
Ministers from Belgium, France, Lux-
embourg, the Netherlands, and the
United Kingdom met to plan a response
to Soviet aggression. Six months later
they signed the Brussels treaty for
collective self-defense and set up
the Western European Union as a de-
fense organization. Field Marshall
Montgomery was Britain's military rep-
resentative.

These steps led to a historic con-
ference in Washington. On April 4,
1949, leaders from the 12 original
member nations signed the North Atlan-
tic Treaty, establishing NATO as an
organization designed to provide collec-
tive defense and to preserve peace and
security. Just 1 month later, the Berlin
blockade was lifted.

But the message of the blockade had
come through loud and clear to the new
Atlantic alliance. And so NATO's
member nations began to reorganize and
re-equip their defenses, producing their
first new weapons in many years.

The main task: a military command
structure with General Dwight D.
Eisenhower as the first Supreme Allied
ommander in Europe. His mission: to
organize the new alliance's collective
defense.

At that time, NATO had only 14
divisions on the mainland of Europe to
'ace the Soviet's 210 divisions. Then in
Tune 1953, riots broke out in the eastern
sector of Berlin and were suppressed by
Soviet tanks. Three years later, when a
ull-scale uprising took place in
Budapest, Hungary, the Soviet Union
once again sent in the tanks to crush a
oopular rebellion.

In 1961 President Kennedy met the
Soviet leader, Mr. Khrushchev, to try
ind improve East- West relations. Two
nonths later, faced with a massive ex-
odus of East Germans to the West,

Khrushchev reacted by sealing off the
Soviet sector of Berlin.

During the previous 6 months, more
than 100,000 East Germans had fled to
the West. The East German regime bar-
ricaded off East Berlin and began to
build the Berlin Wall. As the wire and
the concrete grew daily higher, hun-
dreds of people made desperate last-
minute escapes.

In 1968 the Soviet Union and four
Warsaw Pact countries invaded
Czechoslovakia to put an end to
Alexander Dubcek's socialism with a
human face. The West condemned the
Czech invasion, but dialogue went on.

During the era of detente, of which
the high-water mark was the Helsinki
Final Act of 1975, the West held back
on building new weapons, but the
Soviets showed no such restraint.

In 1977 a new threat to Europe
emerged with the initial deployment of
what were to become hundreds of
SS-20s, the Soviet Union's new, highly
accurate, and mobile intermediate-range
nuclear missiles. With three warheads
and a reload capability, the SS-20s
posed a new threat to virtually all of
Europe.

NATO agreed to begin its own INF
[intermediate-range nuclear force]
deployment in 1983 unless an arms con-
trol agreement made it unnecessary.
During this period, the Soviet Union
continued to export its muscle around
the world. In 1979 it invaded
Afghanistan. More than 4 years later,
120,000 Soviet troops still occupy that
country.

Then in 1981, the Soviet Union ex-
erted pressure to smother the Solidarity
movement in Poland. Under the threat
of Soviet military intervention, the
Polish authorities declared martial law
in December and arrested Lech Walesa
and other trade union leaders.

Despite the Soviet action, the
alliance's search for arms control con-
tinued, following its zero option call to
eliminate an entire category of missiles
on both sides. The alliance made a series
of compromise proposals on inter-
mediate-range nuclear forces, but the
Soviet Union rejected any compromise
that would deprive it of its monopoly of
these weapons in Europe.

luly 1984

Finally in November 1983, faced
with the failure of its policy of blocking
NATO deployment, the Soviet Union
abruptly walked out of both INF and
START [strategic arms reduction talks]
negotiations. NATO and the United
States have repeatedly called on the
Russians to return to the negotiating
table. NATO is determined to hold its
nuclear stockpile down to the lowest
level needed to ensure deterrence and
recently decided to cut its nuclear
stockpile to its lowest level in 20 years.

So this is the position in which
NATO finds itself as it celebrates its
35th birthday, still facing a potential
threat from the East and trying to
adhere to the motto "Peace: The Atlan-
tic Promise."

Q. Is the United States satisfied
that NATO is as strong as it ought to
be in this, its 35th year?

A. It's always important to look at
what is going on and to develop your
strength. So, certainly, there are things
that ought to be done. But, basically,
NATO is strong and firm, and I think
continues to be the best guarantee of
peace that we have.

Q. In Denmark and other Euro-
pean countries, parliaments and the
public, in various ways, have ex-
pressed growing disenchantment with
the NATO policies, especially around
the 572 Pershing and cruise missiles.
Do you see this as a real threat to
NATO solidarity?

A. It is, of course, a problem. At the
same time, I think it's important for us
to continually develop the very strong
arguments there are in favor of being
able to defend our values, of being able
to deter aggression from the Soviet
Union and standing up to these prob-
lems, and that is what we continually
do.

Q. This week six countries — one of
them Greece, a member of NATO —
signed a peace accord telling both you
and Moscow to stop testing, or deploy-
ing, nuclear arms. In your opin-
ion— you opened this by saying that
you feel that NATO is strong, is
firm — does this kind of cabal, this
grouping of other countries, make the
alliance less strong, less firm?

A. Of course, countries will speak up
and develop a point of view. Not all of
those countries were NATO countries,

of course; only one. I think it's clear that
people are concerned about nuclear
weapons.

President Reagan has said that his
dream is the total elimination of nuclear
weapons. In the position taken by the
United States on behalf of NATO, in-
sofar as the intermediate-range weapons
are concerned, that position was the
total elimination of these weapons.

I think those who say that we should
stop deploying have to ask themselves,
do they really want a world in which
only the Soviets have deployed these
weapons? Do they think that it is a safe
world? Do they think that is the way to
defend the values that I presume these
countries put forward? Our answer to
that is no. We want reduction, but they
have to be reductions that come down in
an equal way and leave us in a balanced
and therefore deterrent posture.

Q. President Reagan has just said
that the world has never been safer.
How can you explain that, knowing of
the growing East-West tensions, the
gulf war. General Ustinov's [Soviet
Defense Minister] threats about hav-
ing more missiles, and even close to
the United States?

A. Of course, there are plenty of
tensions, and that is the state of the
world all right. On the other hand, I
think that the strength of the United
States, the strength of NATO, the
strength of other countries around the
world, and Asia and elsewhere, is our
best insurance policy that aggression
will be deterred because it is apparent
that it will meet strong resistance. In
that sense, we have the best guarantee
of peace.

We all saw, and perhaps it's useful
to remind ourselves of what happened in
an earlier age, in the 1970s and at the
end of the 1930s when, for some reason,
people thought that the road to peace
and safety was disarmament. That
turned out to be a very poor idea, and it
only invited aggression.

We're strong. I think it's important
to stay that way. We're realistic about
what's going on around the world, and it
is important to continually remind
ourselves of what is really taking place.
At the same time it's important always
to be reasonable, to be ready to engage
in discussions with the other side in an
effort to bring down the levels of ar-
maments and to work out a more accom-

modating and constructive pattern for
our mutual behavior. Those are the prin-
ciples on which the President and, I
think, the NATO alliance is operating.

Q. How would you evaluate the
specific contribution of Spain in
NATO if Spain should integrate the
alliance militarily?

A. First of all, Spain makes a con-
tribution right now because Spain is a
place where there are bases, and Spain
has an armed capability, and it has
moved in the direction of NATO. I think
the integration of Spain fully into NATO
and full membership, and being part of
the so-called joint command, would
strengthen Spain and strengthen the
NATO alliance because it would further
develop that alliance and add capability
to it. So I think it would be a construc-
tive move. It would help develop the
deterrent capability of the alliance and,
therefore, serve the cause of peace in
Europe. I think that that is certainly to
Spain's advantage.

Q. The Soviet Union can launch a
nuclear attack on the United States
and Europe from the Kola Peninsula.
How would NATO meet this Soviet
capability; and, secondly, what are the
prospects for Norway as a potential
battleground?

A. Of course, the cruel fact that we
have to face is that the world is really a
small place, whether you're talking
about the ability to move information
around, as is illustrated by this very pro-
gram, whether it's a question of moving
goods and services around in the trade
that we have, or whether it's the
awesome capability of modern weapons
which can reach over very long
distances.

The fact of the matter is that all of
us together have a stake in maintaining
a deterrent capability so that this kind
of nuclear battleground never comes
into being. I don't think that geographic
nearness, so to speak, has the same
meaning that it might have had in
earlier days. So no doubt the United
States is fully as vulnerable, perhaps
more so, than Norway. That only em-
phasizes the underlying reason why we
have a NATO alliance, why countries
that are geographically spread apart
have come together and work together
to provide the deterrent capability that
we need.

Q. The French have proposed a
renewed effort to create a European
pillar of defense within NATO, and
the Western European Union Foreign
Ministers are meeting in Paris next
month. What form do you think that
pillar should take? Is there a danger it
could be divided?

A. We have been assured that the
intent is not divisive at all, but to the
contrary, to strengthen the European
contribution to NATO. I have every
reason to believe that that is precisely
the intent, and so I think focusing on
the capabilities of different countries
and what further things they may do is
a constructive move.

Q. The United States seems to be
putting more emphasis on military and
defense preparations in the North
Atlantic than before. Does this reflect
a growing importance of this area,
and consequently of Iceland, or
possibly a changing strategy in the
northern flank?

A. No, I don't really want to com-
ment on that from a strictly military
point of view, but obviously, it's a very
important area and has been regarded
as such for a long, long time. I used to
be in the Marine Corps in World War II,
and of course, I fought in the Pacific
Theater — and you associate the Marines
in World War II with the Pacific
Theater — but I well remember, when I
started in, in the early 1940s, that
Iceland was the place where the Marines
were stationed, and people wondered if
that's where they were going to be
assigned. I mention that only to show
how long it has been that people have
seen the strategic importance of that
area.

Q. President Reagan, Wednesday,
said at a press conference that
nondeployment of cruise missiles in
Holland will not affect NATO serious-
ly. What is your opinion on this issue?
And will the issue be raised, the issue
about a Dutch decision, at the forth-
coming NATO council in Washington
next week?

A. The President has emphasized on
a great many occasions, as have the
other NATO countries, the importance
of carrying through on the decision
made in 1979 to follow simultaneously a
track of deployment to deter the Soviet
deployments of intermediate-range

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Department of State Bulletin

il|1

FEATURE

NATO Ministerial

missiles and continually to try to
negotiate a limitation or, from our point
of view, ideally, an elimination of these
deployments.

We support them in all of the
deploying countries; we think it is very
important that each country step up to
the mark, and certainly, that is exactly
what is taking place. I know there are
difficulties in the Netherlands right now,
and we continue to believe that it's very
important that this go forward.

Q. The German Government,
especially the German Defense
r Secretary, Herr Werner, is not very
r enthusiastic over the Strategic
Defense Initiative. The Germans think
it could create some sort of a — two
1 different classes of security. Do you
think the quarrels over the SDI are a
danger for the alliance's unity in the
lear future?

A. I think it's essential for us to talk
lur differences through, and of course,
I t's something new to talk about, and
|i >eople have to understand it. That proc-
ess is well underway and I think will
I' 'esult in a general consensus of support.
The fact of the matter is that the
soviet Union has a deployed antiballistic
nissile system and has been engaging in
; -igorous research on this subject. The
; 'resident believes that it would be a
•ery bad thing for the alliance if we
| vere to wake up one day and they had

lone all this work and they had
! irepared themselves and had something
i eady to put in place, and we were still

cratching our heads. So I think that
t his is something where we have to
] love into this in a somewhat higher
1 ear.

At the same time, the President has
lade it very clear that we expect to
i hare what we're doing with our allies so
ii hat it's not a question of the United
I Itates doing something and the others
eing left behind. Of course, the fun-
amental motive of it is to achieve the
I ame thing as we are trying to achieve
I y reductions, and reductions to zero in
jhe case of the intermediate- range
| uclear missiles — but generally, reduc-
tions in nuclear weapons — and that is to
I educe their capacity to harm mankind.

Q. Before the European Parlia-
lent. President Mitterrand today
poke about the need for Europe to
ave a common defense policy. Do you

believe that by pursuing this goal, it
will reinforce the alliance?

A. A common defense policy, I
assume within the framework of
NATO— and that's what we hear reaf-
firmed all the time, and that's where we
stand, and we think that is very impor-
tant to keep developing. I don't have any
idea that President Mitterrand is sug-
gesting separation of Europe from the
United States— quite the contrary. We
had outstanding talks with President
Mitterrand when he was here not too
long ago and reaffirmed all of these
basic principles of our unity.

Q. According to Portuguese
military sources, it is known that the
United States has plans to intervene in
the Azores to guarantee the security
of the residents of the American bases
in case of conflict.

Wouldn't it be more economical to
grant the Portuguese Armed Forces
the means to guarantee for themselves
the security of the Azores, of the Por-
tuguese territory, and in this very
same sense, couldn't the United States
be ready to accept the Portuguese con-
tention for a defined command for the
whole Portuguese national territory,
including the Azores in the Atlantic
area?

A. You've asked me a question that
has a great deal of detail in it. I don't
want to make an effort to go through at
length what it would take to answer
that question fully, but I think the main
points are these: first, the Azores are a
very important piece of territory, as has
been demonstrated many times; number
two, the United States and Portugal
have worked out an agreement about
their use and the development of the
Azores that has been signed, and so
therefore, it is satisfactory to both par-
ties; number three, the fact that it is so
important and it has been developed
means that if there is some threat to it,
it certainly will be defended vigorously,
and I assume both the United States and
Portugal agree to that.

Q. Military aid to Turkey was
given to strengthen NATO's defense of
[inaudible]. Yet, the U.S. Congress has
made cuts in aid for other reasons. If
because of this, this action passes,
what do you intend to do about it?

A. Of course, the President has
taken a very firm position about the im-

portance of our assistance to the
modernization of the Turkish Armed
Forces, and we continue to work and
struggle to convince the Congress that
they must go forward with that. The
developments on Cyprus and the
unilateral declaration on Cyprus of an
independent state have caused great
consternation in the United States— of
course, we haven't recognized it; Turkey
is the only country that has — and that
has brought about a considerable
amount of congressional opposition. Ob-
viously, what we need is to get the
Cyprus issue settled somehow or other,
and that, as we all know, is a very dif-
ficult proposition. But we support the
modernization of the Turkish Armed
Forces in its own right and for the sake
of the NATO positions, as a whole; and
at the same time, these issues that are
basically unrelated nevertheless do have
their impact on people's thinking. On the
one hand, we tried to persuade the Con-
gress to go ahead, and on the other, en-
courage all the efforts by the United Na-
tions and elsewhere to bring the Cyprus
question to some sort of satisfactory
conclusion, or at least get it on a
satisfactory track for moving ahead
toward a settlement.

Q. Do you see a concrete way to
bring the Soviet Union back to the
negotiation table at Geneva without
eliminating Pershing II and cruise
missiles? Don't you think the Euro-
pean NATO partners could eventually
accelerate new negotiation initiatives?

A. I think we have to recognize that
the positions taken by the alliance, by
the United States on behalf of the
alliance, in the intermediate-range
nuclear talks were very reasonable posi-
tions. They are not only the positions
the United States thinks are right, but
they have met the test of discussion in
the alliance, and during 1983 and this
year, the level of conclusion has been
really unprecedented. So they are
reasonable positions. I think it is a great
mistake, when one party walks out, to
say we're going to reward that kind of
behavior by changing our position as an
inducement to get them to come back to
the bargaining table.

We're there; we're reasonable; we're
ready for give-and-take, but the one
thing we have to get across to the
Soviet Union is, we are not ready to
give away the store. To give away the
store, to give them everything they

uly 1984

want, would only lead to unequal levels
of forces and increase the danger
because it would lessen the deterrent
capability of the alliance. And that we
have to keep reminding ourselves of,
while we also remind ourselves that it is
important for us to be reasonable
across-the-board on issues with the East
and the Soviet Union, as we are.

Q. In view of the present develop-
ment in the Persian Gulf, do you find
it feasible, desirable, or possible to
enlarge the area of military respon-
sibilities for NATO in that direc-
tion— I mean in the direction of the
Middle East — an issue that has been
raised before?

A. I think the question of enlarging
NATO responsibilities, as such, is one
issue, and it hasn't — I don't think I
would put it quite that way: The ques-
tion is how NATO, or individual
member-states of NATO, will work at
things that are out of the immediate
area of NATO jurisdiction, you might
say, to work at problems that are ob-
viously problems that we all have a
stake in.

In the case of the Persian Gulf and
the flow of oil resources, of course, they
flow into a world market, and everybody
is affected by the world market, and so
we all have a stake there. In approach-
ing that set of problems, of course, the
United States has a very firm position,
as the President has stated many times,
and part of that position is close con-
sultation with our allies and with the
states of the gulf; and we engage in that
and we are very much a part of the
many diplomatic efforts to try to settle
that conflict down.

Q. The Prime Minister up here,
Pierre Trudeau, who is about to
retire, has spent a great deal of his
time in the last year on sort of a peace
crusade of his own. There has been
some controversy with people in the
Pentagon, whom he has described as
"pipsqueaks" for criticizing him. I'm
wondering whether you feel the Prime
Minister's peace initiative helped the
NATO alliance, or whether or not —
just what you regard the Prime
Minister's initiative as having ac-
complished?

A. Of course, it's always important
to have leaders of the West talking
about peace and let it be known

throughout the world that peace and
stability are what we want. That's the
environment within which we can
preserve our values and develop our way
of life and our economies. So in that
sense, we welcome the Prime Minister's
initiative.

Just what fruit this has borne is a
little difficult to say; nevertheless,
we — the Prime Minister came down and
met at length with the President on this
subject — I happened to be privileged to
take part in that meeting — and we
welcomed the opportunity to talk with
him about his ideas.

Q. Do you believe that the Euro-
pean allies are at present carrying
their fair share of the common defense
burden? And do you share some of the
critical views of the allies that have
been made recently by your former
colleague, Mr. Eagleburger, and your
predecessor, Mr. Kissinger?

A. Of course, there is always more
that we can do. We believe, in the
United States, in our own defense
capabilities that we should be doing
more than we are, and we are engaged
in a struggle with the Congress about
that. I'm glad to say that here in the
United States, and I believe in most of
the countries of NATO, the question is
not whether we should do more, but

35 Years of NATO

1949

April 4

The North Atlantic Treaty Organization is
formed with the signing in Washington, D.C.,
of a treaty for collective defense by 12 coun-
tries— Belgium, Canada, Denmark, France,
Iceland, Italy, Luxembourg, the Netherlands,
Norway, Portugal, the United Kingdom, and
the United States.

The preamble to the 14 articles of the
North Atlantic Treaty emphasizes that the
alliance is created within the framework of
the UN Charter. It also outlines as NATO's
main objectives to:

• Live in peace with all peoples and all
governments;

• Safeguard the freedom, common

heritage, and civilization of their peoples,

founded on the principles of democracy, in-
dividual liberty, anil the rule of law;

how much and what can we stand in the
light of the other constraints on our
governmental budgets and so forth. So I
think there is a big load. It is being
shared but, nevertheless, more should be
done.

I don't share the view that some ex-
press, that somehow or other Europe is
falling behind. Europe is a vigorous
area — many countries from which the
United States has drawn our
heritage — and if it gets behind a little
bit in certain technological areas, I think
there are lots of capable people there,
and it doesn't take a whole lot to turn it
around. Of course, everybody does have
to work and struggle to compete in the
kind of world we're in, and Europe is no
exception to that rule.

Q. Is there any chance of the
Federal Republic of Germany turning
to neutralist tendencies if the present
East-West stalemate continues?

A. I don't see any danger of the
Federal Republic of Germany becoming
a neutralist country. It's very firmly a
part of NATO and very firmly a part of
the West, and that seems to be the view
of not only the party in power in the
government, but basically of the opposi-
tion party as well.

'Press release 143 of May 31, 1984.

• Promote stability and well-being in the
North Atlantic area; and

• Unite their efforts for collective
defense and for the preservation of peace ano
security.

The treaty is the framework for a
military alliance designed to deter, or if
necessary repel, aggression. It also provides
for continuous cooperation and consultation
in political, economic, and other nonmilitary
fields.

Article ."> is the core of the treaty: An
armed attack against one member is to be
treated as an attack against all.

August 24

The North Atlantic Treaty enters into force.

September 17

The North Atlantic Council (NAC)— NATO's
highest decisionmaking body and forum for
consultations— holds its first session in
Washington.

Department of State Bulleti

Fein
Grte

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HA

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I Pa

FEATURE

NATO Ministerial

1950

January 27

President Truman approves a plan for the in-
tegrated defense of the North Atlantic area,
releasing $900 million in military aid funds.

August 1

Turkey announces its decision to apply for
membership.

October 2

Turkey accepts NAC invitation to be
associated with NATO military agencies in
Mediterranean defense planning.

October 5

Greece accepts NAC invitation to be
associated with Mediterranean defense
planning.

December 19

U.S. General Dwight Eisenhower becomes
Supreme Allied Commander Europe
(SACEUR).

December 20

The Western Union Defense Organiza-
tion— created in September 1948 by Belgium,
France, Luxembourg, the Netherlands, and
the United Kingdom — merges into NATO.

1951

April 2

Allied Command Europe (ACE) becomes
operational with Supreme Headquarters
Allied Powers Europe (SHAPE) located near
Paris.

July 24

A conference, convened by the French
Government in Paris February 15, approves
an interim report to NATO governments
recommending the creation of a European
army.

1952

January 30

J.S. Vice Admiral Lynde McCormick
becomes first Supreme Allied Commander
Atlantic (SACLANT).

February 18

Greece and Turkey become members.

February 20-25

^JAC, meeting in Lisbon, reorganizes the
tructure of the alliance, and NATO becomes
i permanent organization with headquarters
n Paris.

February 21

U.K. Admiral Sir Arthur Power becomes
first Commander in Chief of the NATO Chan-
nel Command (CINCHAN).

April 4

Lord Ismay (U.K.) takes office as the first
Secretary General.

April 10

SACLANT becomes operational, with head-
quarters in Norfolk, Virginia.

April 28

NAC meets for the first time in permanent
session in Paris.

May 27

Belgium, France, Italy, Luxembourg, the
Netherlands, and the Federal Republic of
Germany sign a treaty in Paris setting up the
European Defense Community (EDC). NATO
governments give guarantees to the EDC
members.

1954

May 7

In reply to a Soviet note of March 31,
France, the U.K., and the U.S. reject the
Soviet Union's request to join NATO.

1955

May 5

The Federal Republic of Germany becomes a
member.

July 18

First conference of NATO parliamentarians
(becomes the North Atlantic Assembly in
November 1966) meets in Paris. The con-
ference, independent of NATO, is formed to
encourage Atlantic solidarity in national
parliaments.

December 15-16

NAC ministerial decides to equip NATO
forces with nuclear weapons. It also decides
to strengthen air defenses by closer coopera-
tion among European NATO countries.

1956

May 4-5

NAC ministerial instructs Gaetano Martino
(Italy), Halvard Lange (Norway), and Lester
Pearson (Canada)— the "Three Wise
Men" — to draw up a report with recommen-
dations on how to improve and extend
cooperation among the NATO countries in
nonmilitary fields and develop greater unity
within the Atlantic community.

luly 1984

December 13

NAC approves the report of the "Three Wise
Men" and adopts resolutions on the peaceful
settlement of disputes between member coun-
tries and on nonmilitary cooperation in
NATO.

1957

May 16

Paul-Henri Spaak (Belgium) succeeds Lord
Ismay as Secretary General.

December 16-19

Heads of government, meeting in Paris, re-
affirm the principles and purposes of NATO.
NAC decides to promote closer cooperation in
the political and economic fields and to in-
crease scientific and nonmilitary cooperation.

December

NATO establishes a Science Committee to
strengthen the scientific and technological
capabilities of the alliance.

1958

April 15-17

NATO Defense Ministers, meeting in Paris,
reaffirm defensive character of NATO
strategy.

May 5-7

NAC ministerial, meeting in Copenhagen,
says it favors negotiations with the East, pro-
viding the East offers prospects of settle-
ment of outstanding problems.

December 16-19

In response to November 10 Soviet plan to
terminate the four-power agreement on the
status of Berlin, NAC ministerial declares the
right of Western powers to remain in Berlin.

1960

December 16-18

NAC ministerial confirms its declaration of
December 1958 on Berlin.

1961

April 21

Dirk Stikker (Netherlands) succeeds Paul-
Henri Spaak as Secretary General.

December 13-15

NAC ministerial, meeting in Paris, reaffirms
its position on Berlin and condemns the erec-
tion of the Berlin Wall in August. It also ap-
proves the renewal of diplomatic contacts
with the Soviet Union to seek a basis for
negotiation.

NATO establishes a mobile task force.

1962

May 4-6

NAC meeting of Foreign and Defense
Ministers, in Athens, establishes guidelines
for alliance use of nuclear weapons.

December 18-20

At a meeting in The Bahamas, President
Kennedy and Prime Minister MacMillan
agree to contribute part of the U.S. and U.K.
strategic forces to NATO.

1963

May 22-24

NAC ministerial, meeting in Ottawa, assigns
the British V-bomber force and three U.S.
Polaris submarines to SACEUR, who is to
appoint a deputy responsible to him for
nuclear matters.

June 25

On a visit to Europe, President Kennedy
reaffirms America's guarantee to defend
Europe. He also reaffirms the principle of
equal partnership within NATO.

December 16-17

In a message to the NAC ministerial meeting
in Paris, President Johnson renews U.S.
pledges of "steadfast resolve" concerning
NATO.

1964

August 1

Manlio Brosio (Italy) succeeds Dirk Stikker as
Secretary General.

1965

November 27

A special committee of the NATO Defense
Ministers initiates a study to explore ways of
improving allied participation in nuclear
planning.

1966

March 29

The French Government announced that
France will withdraw from NATO's in-
tegrated military commands on July 1, 1966,
and that all NATO military forces and
facilities are to be removed from France by
April 1, 1967.

July 25

NATO Defense Ministers, meeting in Paris,
adopt a NATO force plan for the period up to
and including 1970.

December 5

The Defense Planning Committee (DPC) ap-
proves the Iberian Atlantic area
(IBERLANT), the first NATO command in
Portugal.

December 14

DPC establishes the Nuclear Defense Affairs
Committee (NDAC) and the Nuclear Planning
Group (NPG).

1967

March 31

Official opening ceremony marking the
transfer of SHAPE to Mons, Belgium.

April 6-7

First meeting of the NPG held in
Washington.

June 5

NATO sets up NAVSOUTH in Malta as a
principal subordinate command under the
Commander in Chief Allied Forces, Southern
Europe (AFSOUTH).

October 16

New NATO headquarters officially opens in
Brussels.

December 13-14

NAC ministerial meeting approves the
Harmel report on the future tasks of the
alliance.

NATO adopts a new strategic concept of
a flexible and balanced range of appropriate
responses, conventional and nuclear, to all
levels of aggression or threats of aggression.

NATO establishes the Standing Naval
Forces Atlantic (STANAVFORLANT).

1968

May 10

DPC ministerial, meeting in Brussels, re-
affirms the need for a balance of forces be-
tween NATO and the Warsaw Pact and
states that present circumstances do not
justify the development of an antiballistic
missile system in Europe.

June 24-25

At NAC ministerial, meeting in Reykjavik,
NATO proposes negotiations with the War-
saw Pact on mutual and balanced force reduc-
tions (MBFR) in central Europe.

November 13-14

The Eurogroup is established within the
framework of NATO as an informal associa-
tion of Defense Ministers of European
member governments. It seeks to: (1) im-
prove the effectiveness of the European con-
tribution to the alliance through closer coor-

dination and the best possible use of
resources and (2) provide a forum for
Defense Ministers to exchange views on ma-
jor political and strategic questions affecting
the common defense.

November 21

Maritime Air Forces Mediterranean
(MARAIRMED) is activated at Naples to im-
prove NATO's surveillance of the Mediter-
ranean area.

1969

November 6

NATO sets up the Committee on the
Challenges of Modern Society (CCMS) to pro-
mote international action on problems of the
human environment.

December 3-5

NAC ministerial, meeting in Brussels, issues
a declaration on East-West relations.

1970

March 20

NATO launches its first communication
satellite from Cape Kennedy, Florida.

May 26-27

At NAC meeting in Rome, NATO elaborates
its MBFR proposal of December 1968.

December 2-4

At NAC ministerial in Brussels, the U.S.
pledges to maintain and improve its forces in
Europe if the other NATO allies will do the
same. The U.S. promises that reductions will
only be made in the context of reciprocal
East-West reductions.

The DPC adopts a study on "Alliance
Defense in the '70s."

1971

August 20

DPC orders transfer of NAVSOUTH from
Malta to Naples.

October 1

Joseph M.A.H. Luns (Netherlands) succeeds
Manlio Brosio as Secretary General.

1972

May 30-31

At NAC ministerial, meeting in Bonn, NATO
agrees to begin multinational preparatory
talks in Helsinki for a Conference on Security |,IS,
and Cooperation in Europe (CSCE). NATO
also proposes multilateral explorations on
MBFR.

Department of State Bulletin

FEATURE

NATO Ministerial

December 7-8

NAC ministerial, meeting in Brussels,
resolves to maintain NATO defenses in the
face of expanding Warsaw Pact forces.

1973

July 3-7

First phase of the 35-nation CSCE begins in
Helsinki.

October 30

MBFR talks between NATO and the Warsaw
Pact open in Vienna.

December 10-11

At NAC ministerial, meeting in Brussels,
members of NATO's integrated military
structure recognize that a common alliance
effort is needed to maintain U.S. forces in
Europe at current levels.

1974

June 14

DPC reaffirms the importance of standardiza-
tion and specialization of defense tasks.

(une 18-19

Observing the 25th anniversary of NATO,
;he NAC ministerial, meeting in Ottawa,
idopts and publishes a declaration on Atlan-
,ic relations.

August 14

jreek forces withdraw from NATO's in-
egrated military structure.

| 975

ulv 31-August 1

^inal phase of CSCE is held in Helsinki. The
J.S., Canada, and all European countries (ex-
ept Albania) sign the Helsinki Final Act.

)ecember 9-10

)PC ministerial, meeting in Brussels, notes a
ontinued increase in Warsaw Pact strength
nd capabilities, reaffirms the importance of
naintaining and strengthening NATO's
orces, and reviews efforts to improve stand-
.rdization and compatibility of military equip-
nent within the alliance.

976

)ecember 9-10

JAC ministerial, meeting in Brussels, ex-
resses its determination to enhance allied
ohesion and strength and, in light of the
lelsinki Final Act's provisions, rejects War-
,w Pact proposals to renounce first use of
iuclear weapons and to restrict alliance
nembership.

1977

May 17-18

DPC ministerial agrees to a long-term
defense program for NATO.

June 8-9

NPG, meeting in Ottawa, notes continuing
improvements in Soviet nuclear forces, in-
cluding mobile intermediate-range systems.

October 4

First CSCE follow-up meeting opens in
Belgrade to review compliance with the
Helsinki Final Act.

October 11-12

NPG ministerial, meeting in Bari (Italy),
establishes a high-level group on theater
nuclear force modernization within the con-
text of the long-term defense program.

1978

March 9

CSCE follow-up meeting in Belgrade ends
without agreement.

April 18-19

NPG, meeting in Denmark, notes with con-
cern the increased Soviet capability in longer-
range theater nuclear weapons — including
the triple-warhead SS-20 mobile
missiles — and endorses the importance of
modernizing NATO's theater nuclear forces.

November 18

NATO launches its third communications
satellite from Cape Canaveral, Florida.

December 5-6

NATO approves an airborne early warning
and control system (AWACS) program.

1979

April 11

NATO establishes a special group to study
the arms control aspects of theater nuclear
systems.

December 12

Following intensive NATO consultations, a
special meeting of NATO Foreign and
Defense Ministers, meeting in Brussels,
adopts a "dual-track" strategy to redress the
Soviet buildup of intermediate-range nuclear
forces (INF) through arms control negotia-
tions with the Soviet Union if possible but, if
necessary, through modernization of its own
INF forces.

• Arms Control Track: NATO offers
U.S. -Soviet arms control negotiations to limit
or eliminate longer-range intermediate-range
nuclear force (LRINF) missiles.

• Modernization Track: NATO decides to
deploy 572 U.S. single- warhead Pershing II
and ground-launched cruise missiles (GLCM)
in Western Europe beginning at the end of
1983 if no arms control agreement had been
reached by that time. NATO also decides to
withdraw 1,000 nuclear warheads. In addi-
tion, NATO pledges to withdraw one older
nuclear weapon for each Pershing II and
GLCM deployed.

December 29

Special NAC session discusses December 21
Soviet invasion of Afghanistan.

1980

January 24

NATO establishes the Special Consultative
Group (SCG) to serve as a forum for consulta-
tions on INF arms control matters.

October 20

Greek forces are reintegrated into NATO's
military structure.

November 11

The second CSCE follow-up meeting opens in
Madrid.

1981

November 20

SCG welcomes President Reagan's
"zero-zero" proposal of November 18 to
eliminate the entire class of U.S. and Soviet
land-based LRINF missiles.,

November 30

U.S. and the Soviet Union open INF negotia-
tions in Geneva.

December 2

Spain formally applies for membership.

December 10

NATO issues declaration condemning all acts
of terrorism.

1982

January 11

Special NAC ministerial issues declaration on
Poland following General Jaruzelski's imposi-
tion of martial law on December 13, 1981.

May 30

Spain becomes 16th member.

June 10

NAC summit meeting issues the Bonn
declaration setting out NATO's program for
peace in freedom.

uly 1984

1983

March 31

NAC issues statement supporting the U.S.
INF initiative of March 30, 1983, to break
the stalemate by proposing an "interim agree-
ment" at the Geneva INF negotiations.

September 9

CSCE follow-up meeting ends in Madrid with
the signing of a concluding document by all
35 participating nations.

October 27

The NPG, meeting in Montebello (Canada),
announces that NATO will remove about
1,400 warheads from Europe over the next
5-6 years and thus reduce its nuclear
stockpile to the lowest level in 20 years.
These unilateral reductions are in addition to
the 1,000 tactical nuclear weapons already
withdrawn in 1980 in accordance with the
December 1979 dual-track decision.

December 7

In its final communique,

DPC ministers:

• Emphasize determination to move
ahead with the dual-track approach to LRINF
modernization and arms control to redress
the military imbalance with the Soviet Union;

• Regret Soviet suspension of the INF
talks on November 23, 1983, and emphasize
NATO's desire for resumption as soon as
possible;

• Reaffirm that NATO is prepared, in ac-
cordance with the terms of any INF agree-
ment which may be reached, to halt, modify,
or reverse its current missile deployments in
conformity with the 1979 decision;

• Reaffirm the need to strive for a
mutually acceptable solution to the issues
still barring progress at the MBFR talks in
Vienna; and

• Stress the importance they attach to
the Conference on Confidence- and Security-
Building Measures and Disarmament in
Europe (CDE) as an opportunity to negotiate
politically binding, militarily significant, and
verifiable measures to reduce the risk of sur-
prise attack.

December 8

SCG releases a report in Brussels listing
NATO's efforts to secure an INF agreement.
The report concludes that despite intensive,
sustained alliance effort over the last 2 years,
Soviet insistence on retaining a monopoly on
LRINF has prevented agreement and that
continued alliance implementation of the 1979
decision remains essential to the prospects
for arms control to ensure the security of the
alliance and to provide the foundation for a
more stable and cooperative relationship with
the East.

1984

January 17

CDE opens in Stockholm. Its mandate-
adopted by the 35 CSCE nations in
Madrid — is to negotiate confidence- and
security-building measures to reduce the risks
of a military confrontation in Europe.

January 24

The 16 NATO nations table the first package
of proposals at the CDE.

April 19

NATO allies introduce a new proposal at the
MBFR talks in Vienna to break the impasse
caused by discrepancies in the Eastern and
Western data on the size of Eastern forces
now in central Europe. Instead of requiring
formal data agreement on all forces in central
Europe before reductions begin, the West
now stands ready to accept an exchange of
data that falls within an acceptable range of
Western estimates on the combat and combat
support forces of both sides.

May 29-31

NAC Foreign Ministers, meeting in
Washington, issue a statement on East- West
relations supporting the pursuit of dialogue
and cooperation based on the maintenance of
adequate military strength and political
solidarity and equitable and verifiable arms
control agreements.

June 25

Lord Carrington (U.K.) succeeds Joseph
M. A. H. Luns as Secretary General. ■

Department of State Bulletin

THE PRESIDENT

The Struggle for Freedom
in Latin America

President Reagan's remarks at a
meeting of the Council of the Americas at
the Department of State on May 8, H>s:t.'

Thank you all very much, and' I ap-
preciate this opportunity to be with you
today.

You may have heard that I will be
speaking to the American people tomor-
row evening on the very subject that
you are discussing here, our respon-
sibilities in this hemisphere. As members
of the Council of the Americas, you've
fostered cooperation and understanding
between the United States and our
neighbors in the south.

Having been Governor of California,
I've long been aware of the rich
Hispanic heritage of our country. The
Hispanic heritage that we appreciate so
much in our Southwestern States
reflects not just our traditions but on
the many things which all the peoples of
:his hemisphere share.

Simon Bolivar, the Great Liberator,
saw this natural bond between all
\mericans. Early in the last century, he
;aid of us, "We are a special kind of
mman being. We have a world apart."
Building the ties between our people and
he 380 million people in the 33 coun-
ries of Latin America has been of ut-
nost importance to this Administration.

Our polices toward Latin America
ire aimed at achieving three consistent
ind mutually enforcing goals.

First, we seek to encourage the
■ levelopment of democratic political in-
titutions.

Second, we want to see all the
ieoples of the Americas better their
tandard of living and improve the vitali-
y of their economies.

Third, we want to help our friends
efend themselves from Soviet bloc- and
luban-sponsored subversion.

Some of the most inspirational
eroes of human liberty emerged from
he struggles for freedom and in-
ependence in Latin America. One of
hem, Jose Marti, a Cuban patriot who
Dund refuge in the United States from
despotic regime in his native land,
nee said, "Like bones to the human
ody, the axle to the wheel, the wing to
he bird and the air to the wing, so is
iberty the essence of life. Whatever is
one without it is imperfect."

uly 1984

That spirit is alive and growing in
Latin America today. Right now, of
Latin America's 33 countries, 26 with
about 90% of the region's population,
are either democratic or in transition to
democracy. A decade ago, less than 40%
of Latin America's population was so
fortunate.

Transition to , democracy in Peru,
Equador, and the Dominican Republic
has been followed more recently by Hon-
duras and Argentina. All of this should
give us tremendous hope for the future.
No longer can communist dictatorship be
juxtaposed against rightist dictatorship
as the only alternative.

In June of 1982, I was honored to
speak before the British Parliament, the
living monument to democracy. I pro-
posed that the people of free countries
take a more active role in encouraging
and aiding in the development of
democratic institutions, such as political
parties and civic groups throughout the
world. For many years, we'd been doing
something similar to that by helping
build democratic trade unions. With con-
gressional enactment of the National
Endowment for Democracy, another
little-noticed yet, nevertheless, 'giant
step forward has been made. The na-
tional endowment is now working to
strengthen democratic parties, trade
unions, business and civic associations,
and other democratic institutions.

The times we live in are as challeng-
ing and as exciting as any in history.
There are people in Latin and Central
America who are fighting for their
freedom every bit as much as our own
forefathers. Last Sunday, this struggle
for freedom took the shape of Presiden-
tial elections in Equador, Panama, and
El Salvador.

In El Salvador, unofficial results in-
dicate the winner will be Napoleon
Duarte, a Christian Democrat, who for
more than two decades has been in the
forefront of democratic reform and in
opposition to the communist left and the
violent right.

We look forward to a cordial and
productive working relationship with El
Salvador. The fact that the Salvadoran
election was held at all reflects the
dedication to democracy and personal
courage of the people of that troubled
land.

The communist guerrillas warned
people not to vote, yet the people defied
the threat. The guerrillas mined roads,
and still many thousands walked miles
to mark their ballots. Each one of these
people who braved such threats deserves
our greatest respect and admiration.

A member of my National Security
Council staff, Jackie Tillman, was down
there last Sunday. She was accompany-
ing Members of the Congress and others
who were there to witness the elections.
She met a young 15-year-old poll watch-
er and asked him— 15-year-old— asked
him how he felt about the voting, half
expecting a typical, nonchalant, adoles-
cent reply. And instead, he pointed to
his heart and very quietly said, "I feel
this voting right here. This is what my
country needs," he said, "to defeat the
guerrillas and bring peace." That lad,
and the millions of other courageous in-
dividuals like him, people who've main-
tained their dignity and honor in the
face of such adversity, are, indeed,
heroes of democracy.

The economic challenges faced in the
southern half of this hemisphere appear
as monumental as those in the political
arena. Yet, there's reason for hope. For
the three decades after the Second
World War, substantial economic prog-
ress was made in Latin America.
Growth rates, in fact, matched those in
the industrialized democracies and im-
proved the standard of living of a
significant proportion of the population.
At the same time, however, a rapid in-
crease in the population strained
resources and left many in dire poverty.
The leap in energy prices and the onset
of global recession in 1979 was felt the
world over. Few places experienced
more pain than Latin America and the
Caribbean.

While coping with worldwide
economic currents must be the primary
responsibility of each country, we're
doing what we can to help. We in-
creased by over 50% the level of
bilateral economic assistance over the
previous Administration. We've con-
tinued to support contributions to the
World Bank, the Inter-American Bank,
and International Monetary Fund pro-
grams, all of which are vital to Latin
America. Discreetly, with much care and
consideration for political, social, as well
as economic consequences, we worked
with leaders in government and the
private sector to encourage the refinanc-
ing of international debts. And your
cooperation has been indispensable in
this effort.

THE PRESIDENT

And last year, the Congress enacted
our Caribbean Basin Initiative, a
dramatic and innovative approach to
progress in Central America and the
Caribbean. By opening up one-way free
trade to the United States, the world's
biggest market, we're bringing the vast
resources of the private sector to play in
our efforts to improve the lot of 165
million hemispheric neighbors.

There is no magic or instant solution
to the economic woes that plague our
neighbors to the south, but we can be
confident because in the long run,
freedom works. During the last century
a Venezuelan intellectual, Andres Bello,
noted that "liberty gives wings to the
spirit of enterprise wherever it meets
it." I believe that. That's what
America — and I mean, when I say
"America," from the North Slope of
Alaska to the tip of Tierra del
Fuego — what it is all about.

Liberty is, of course, something we
can't take for granted. One of the
greatest challenges faced by this genera-
tion of Americans is in Central America
today. If we act responsibly, there's no
reason we will not meet this challenge.

As you're aware, a bipartisan com-
mission on Central America, headed by
Henry Kissinger, came to that conclu-
sion when they reported in mid-January.
In Central America today, freedom-
loving people, our friends, are under at-
tack by Soviet bloc- and Cuban-backed
insurgents. We're trying our best to help

these courageous and decent people
develop their democratic institutions and
better their economic lot. But if we do
nothing or not enough to help them pro-
tect themselves, there will be grim con-
sequences to pay. It's not only their
security; it's our security.

If the communists succeed, if we
face a flood of refugees and a direct
threat on our own southern border, it
will not be because we acted, but
because we refused to do what was
necessary to avert the crisis. And make
no mistake, further communist inroads
in Central America will undermine
stability in the entire region and make
financial problems far more severe.
Together, we can make sure that doesn't
happen. I'll be speaking more about that
tomorrow night.

What a mighty force for good we,
the citizens of all this hemisphere, can
be. What a potential we have from pole
to pole. And yet one should never expect
anything worthwhile to come easy. It'll
take all of us working together, acting
responsibly, and having the courage to
face challenges head-on. But have no
worry, in the end we can, with God's
help, accomplish great things.

I thank you for letting me be with
you today. God bless you, and carry on
in what you're doing.

'Text from Weekly Compilation of
Presidential Documents of May 14, 1984.

Berlin— A Very Special Place for America

The following article by President
Reagan was published in the May 23,
1984, edition of Die Welt.1

Berlin is a very special place for me and
for America.

I visited Berlin in 1978 and again,
after I became President, in 1982. The
first impression entering the city by air
is, of course, that terrible wall which
surrounds and divides Berlin. Despite its
bright white paint and the flowerboxes
placed here and there to soften the ef-
fect, the wall's inhuman purpose cannot
be disguised.

The wall suppresses man's natural
impulse to be free. The angry words of
protest splashed across the western side
of the wall show the frustration that
Berliners feel in living with this symbol
of tyranny, knowing that there are
Berliners too on the other side.

Berlin is a microcosm of a greater
division. The ugly slash that divides
Berlin is replicated on a larger scale in a
similar division of Germany and in the
artificial line cutting off one part of
Europe from another. In divided Berlin,
as elsewhere in divided Europe, families
and friends are separated; contacts
severed; freedoms denied.

This first impression, however, does
not tell the full story. The tragedy of
Berlin is evident even from a distance.
One must move closer to see the
triumph as well. For Berlin is a triumph
of the human spirit. The visitor quickly
realizes and admires the enormous
courage and endurance of the Berliners.
They are the inheritors of a devastated
city. A city the Soviet Union once tried
to bring to its knees through the Berlin
blockade. A city cut in two by that cruel
wall. But Berliners, all the while sur-

rounded by a hostile environment, did
not succumb to threats of pressure.
They have repeatedly come through
adversity with bravery, dignity, and
grace.

Berliners have had to struggle to
maintain their liberty, and their un-
wavering devotion to freedom is an ex-
ample for us all. This is the first lesson
of Berlin: that we cannot be timid in
preserving our democratic way of life.
We must stand up for our freedoms.
The terrible price of losing them is vivid-
ly demonstrated just on the other side of
the wall.

The United States stands with
Berlin. We are honored to have an im-
portant role in the preservation of
Berlin's freedom. The United States has
a solemn obligation to Berlin which time
has only reaffirmed and strengthened.
The American commitment to Berlin is
firm and unshakable.

Berlin, like the rest of the West,
benefits from the ability of the Atlantic
Alliance to deter war. The community of
free nations, dedicated to democratic
ideals, has given Europe a generation of
peace. The unity and strength of the
Atlantic Alliance provide the protective
shield that keeps us free and secure.
Last fall, the Soviet Union failed to in-
timidate the Alliance over the NATO
decision on intermediate-range nuclear
forces. As in Berlin 35 years earlier, the
West refused to bow to Soviet dictates
and is more secure in consequence. The
Soviet Union now knows that the West
will do what is necessary to keep the
peace.

As a testing-ground for Western
strength of will, Berlin has often been at
the cutting edge of East- West relations.
In times past, shock waves from strife
elsewhere were frequently felt in Berlin.
More recently, however, Berlin has
become known for a different kind of
East- West relationship. It has become
an example of the successful manage-
ment of delicate East- West problems.

A longstanding vital function in
which the Soviet Union and the Western
Allies cooperate is the coordination of
Berlin air traffic. The maintenance of
Allied rights and responsibilities with
respect to Berlin air traffic is an integral
part of the working relationship between
the Soviet Union and the Western
Allies.

The Quadripartite Agreement of
1971 has helped Berlin become calmer,
more stable and secure. Berliners have
found it easier to visit and communicate
with friends and relatives in East Berlin
and the German Democractic Republic.
Trade and travel between Berlin and the

Department of State Bulletin

THE PRESIDENT

Federal Republic of Germany have been
facilitated. The Quadripartite Agree-
ment must continue to be strictly
observed and fully implemented, in all
sectors of Greater Berlin.

The second lesson of Berlin is that it
is possible to build constructive and
practical East-West relationships on the
basis of realism, strength, and dialogue.
While we cannot ignore the profound
differences between East and West, we
can accomplish much that is in the in-
terest of all people.

The applicability of this second
lesson extends beyond Berlin — it under-
pins the whole East- West relationship.
By remaining unified in our determina-
tion to defend freedom — in Berlin and
elsewhere — while at the same time ex-
ploring reasonable avenues for improved
East- West relations, the West is making
an important contribution to world
peace. The key is solidarity. As has been
the case for more than 35 years, the en-
tire free world maintains its support for
the freedom of Berlin. Today, it is im-
portant that all of us, Berliners included,
show the same support for oppressed
peoples in places such as Afghanistan
and Poland. If we are to maintain
freedom, we must remain united.

I am optimistic about the future of
Berlin. Berlin is an extraordinarily vital
world city, bustling with prosperity. It
las a rich culture and history. The city
s blessed with great universities and
scientific institutes. Most of all, Berlin is
olessed with the Berliners themselves —
whose strength and spirit have served it
veil. The security guarantee of the
tVestern Allies is inalterable and perma-
j lent, and American ties of friendship
> vith Berlin run deep. East- West accords
lave led to practical improvements to
nake life easier in Berlin. But the bar-
kers to the free flow of information, to
luman contacts, are still far too high,
ven the cultural life of the city is
livided— museums, theaters, symphony
irchestras and operas split between two
ides.

Such human divisions are in-
olerable. If peace is to be secured, we
ust increase our efforts to accom-
odate the human aspirations of
lillions of persons in Europe who are
ot satisfied with the conditions under
/hich they must live. In this regard, I
/ould like to recall my 1982 visit to
Serlin. At that time, I asked the Soviet
Inion to join with the West in working

reduce the human barriers which
ivide Europe. Rather than a symbol of
ppression, reflected in barbed wire and
'alls, would it not be better for Berlin
} be the starting point for the reduction

of the human and political divisions
which create misery in the world?

Today, I would like to repeat that
challenge. In 1987, Berlin— all of
Berlin— will celebrate its 750th birthday.
Would not that occasion be appropriate
for celebrating the further reduction of
the barriers which divide the city?

In 1984, we celebrate another an-
niversary— the 35th anniversary of suc-
cessful conclusion of the Berlin Airlift.
This historic undertaking was made
possible by the close cooperation of

Americans, British and French officials
with their German friends. It was truly
an historic turning point, and the United
States will be forever proud of its role in
saving the freedom of the Western Sec-
tors of this great city. All Americans
join me in the hope that it will not take
another 35 years to restore the unity of
Berlin and that Berliners on both sides
of the wall will one day be able to live
together in peace and liberty.

'Text from the Weekly Compilation of
Presidential Documents of May 28, 1984. I

News Conferences of May 22
and June 14 (Excerpts)

Excerpts from President Reagan's
news conferences of May 22 and June 1A,
198Jt.

MAY 22, 19841

We have an important visitor in
Washington, Jose Napoleon Duarte, the
President-elect of El Salvador. The
President-elect and I yesterday issued a
joint statement in which we agreed on
three major objectives for Central
America: the strengthening of
democratic institutions, the improve-
ment of living standards, and increased
levels of U.S. security assistance to de-
fend against violence from both the ex-
treme left and the extreme right.

The election of Jose Napoleon
Duarte is the latest chapter in a trend
toward democracy throughout Latin
America. In Central America, El
Salvador now joins Costa Rica and Hon-
duras in having a democratically elected
government. Democracy in Central
America is a fundamental goal of our
policy in that region. But continued
progress toward that goal requires our
assistance.

Most of our aid, three-quarters of it,
is economic assistance. But security
assistance is essential to help all those
who must protect themselves against the
expanding export of subversion by the
Soviet bloc, Cuba, and Nicaragua.

Also, as I said in my speech to the
nation on May 9th, we must support the
democratic aspirations of the people of
Nicaragua and oppose the Sandinista ag-
gression against their neighbors, who
seek genuinely democratic elections in

uly1984

Nicaragua, as the Sandinistas promised
the OAS [Organization of American
States] in 1979.

Peace can only be achieved in Cen-
tral America if the forces of democracy
are strong. We strongly support
multilateral efforts toward peace,
especially the Contadora process.
However, no lasting peace settlement
through the Contadora process can be
achieved unless there is simultaneous
implementation of all the Contadora ob-
jectives, including genuinely democratic
elections in Nicaragua. The freedom
fighters in Nicaragua have promised to
lay down their arms and to participate
in genuinely democratic elections if the
Sandinistas will permit them.

Our Congress faces some historic
decisions this week. Those who struggle
for freedom everywhere are watching to
see whether America can still be
counted upon to support its own ideals.
The people of El Salvador are watching,
the freedom fighters of Nicaragua are
watching. Nicaragua's threatened
neighbors are watching, and the enemies
of freedom are watching as well.

Our balanced policy can succeed if
the Congress provides the resources for
all elements of that policy as outlined in
the bipartisan recommendations of the
Kissinger commission. But if the Con-
gress offers too little support, it'll be
worse than doing nothing at all. The
success of communism in Central
America poses the threat that 100
million people from Panama to the open
border on our south could come under
the control of pro-Soviet regimes. We
could face a massive exodus of refugees
to the United States.

THE PRESIDENT

The Congress has the opportunity to
reaffirm our commitment to brave peo-
ple risking their lives for the cause of
liberty and democracy in Central
America. The Congress also has the op-
portunity to reaffirm our bipartisan
tradition, which will tell the world that
we're united when our vital interests are
at stake. I'm asking the Members of the
Congress to make that commitment.

Q. I'ts been reported that you are
willing to provide U.S. air power to
keep oil tankers moving through the
Persian Gulf. Could you tell us what
the Saudi response has been to your
proposal and under what cir-
cumstances the United States could
become militarily involved in that
region?

A. I've seen all the stories and a lot
of them based on speculation
already — no, we have kept in touch and
are keeping in touch with the gulf states
and with our own allies. But we have
not volunteered to intervene nor have
we been asked to intervene. And we've
communicated with them regarding that
and so far it seems as if the gulf states
want to take care of this themselves.
They're concerned, as I think we all
should be, about not enlarging the war.

Q. Do we have a contingency plan
for doing so if they can't take care of
themselves?

A. If they ask us for help, obviously
we've thought in terms of what we
might do. But I don't think that's
something I should talk about.

Q. Senator Byrd says that our rela-
tions with the Soviet Union have
reached the lowest point in 20 years.
Did you misjudge the Russians? Are
your hardline policies responsible for
the boycott of the Olympics, the
breakoff of the arms negotiations,
stepped-up offensive in Afghanistan,
more missiles off our coast?

A. I don't think I'm responsible for
any of those things. And if these are at
the lowest state that we've had for 20
years — not too long ago, just a matter
of days ago, I gave to George Shultz one
of our very eminent national news
magazines for him to see an article on
this very subject. And the article — it
was an April issue— and the article cited
that we had the lowest relations we'd
ever had and the President was to blame
for that — his vacillation and so forth and
so on — except that it was April of 1980
when they were saying that about our
relations with Russia.

And I have to say that today, no, we
didn't walk away from the negotiating

table. We made every effort to prove
that we were ready to be flexible in try-
ing to negotiate a reduction of weapons.

And as for the Olympics, the only
thing as a government that we did in
the Olympics was ensure them and meet
virtually every request that they made
with regard to their people there up to
allowing their cruise ship to anchor, and
we were going to spend about a half-a-
million dollars on protection for that
ship.

Q. Would you admit there's a
heightened belligerency? And six emi-
nent world leaders today said that
we're headed for global suicide. What
are you going to do about it with this
arms race?

A. I don't think we are, and I don't
think we're any closer or as close as we
might have been in the past to a possible
conflict or confrontation that could lead
to a nuclear conflagration. I think the
very fact that we're stronger — yes, the
Soviet Union is unhappy. They're unhap-
py because, for the first time in a couple
of decades, we are preserving our
security ability. We're building up our
military, and we're not unilaterally
disarming while they continue their
massive arms buildup. And I'm sure this
makes them a little unhappy about that,
that things aren't as easy as they once
were.

But when they're ready to come
back to the table, it probably— or might
not be till after the election, I don't
know. But I think that the world maybe
is a little safer than it has been in the
past.

Q. On the Persian Gulf again, is it
true that you have written to the
Saudis saying that should they ask the
United States for aid, that we are
willing to supply air cover to protect
the oil tankers?

A. We haven't specified what we
would do, but we have told them,
because I made a statement earlier that
neither we nor the Western world as
such would stand by and see the straits
or the Persian Gulf closed to interna-
tional traffic.

Q. In your judgment, what is the
likelihood of American servicemen be-
ing involved in some kind of shooting
war shortly or in the near future in
the Middle East?

A. I think very slight. I can't foresee
that happening.

Q. You cannot foresee that hap-
pening?

A. As things stand now, no, I don't
think so.

Q. You've said America's vital in-
terests are at stake in Central
America. What will we have to do if
the Congress does deny that security
assistance to stop this threat of
Soviet-sponsored regimes taking over
all the countries right up to our
southern borders.

A. You say what do we have to do
to—

Q. Yes. Suppose the Congress did
not vote the money that you need for
the freedom fighters, as you call
them? What, then, would we be re-
quired to do to prevent this scenario
from developing?

A. We'd be in the very difficult posi-
tion, and so would they. But I have
great hopes that after President
Duarte's visit here and meeting with as
many of the Congress as he did that
there's some reason for optimism.

Q. There are reports that the Ad-
ministration has gone around Con-
gress and continued to increase
military and intelligence activities in
Central America by channeling money,
through accounting tactics, tricks of
accounting, through the Pentagon to
the CIA. While you can't discuss
covert activities, can you at least
assure the American people that you
have not had this Administration go
beyond the will of Congress in in-
creasing the spending for military ac-
tivities in Central America?

A. We've followed no procedures
that are any different from what has
been done in past Administrations, nor
have we done anything without the
knowledge of the Congress.

Q. Can you explain then, we were
told. Congress was told about a month
ago that if Congress didn't appropriate
the money, the CIA-supported contras
would run out of money by now. Now
Congress has been told that the CIA
has enough money to get through the
rest of the summer. How is that possi-
ble without their getting secret funds?

A. Unless they guessed wrong on
the first statement— I thought that they
were closer to being out of money than
they apparently are. But I don't think
any — nothing of that kind could take
place without the knowledge of Con-
gress.

Q. Two questions on your upcom-
ing trip to Europe. First, are you con-
cerned in any way that the planned
demonstrations in Ireland will mar
what was supposed to be a friendly

Department of State Bulletin

THE PRESIDENT

homecoming for the television
cameras? And, secondly, you have
gone to economic summits for 4 years
now and told the allied leaders that
American interest rates will be com-
ing down and the deficit will be com-
ing down. Given the fact that interest
rates are going up, why should allied
leaders believe you if you sing this
same song — or say the same things
this year?

A. I think that the interest rates are
one of those things that can be volatile.
They slid up here this — they have, if you
compare them to what they were when
we started, they are well down. So,
there was a little increase recently,
which I think represented fear in the
marketplace of possible return of infla-
tion. 'I don't think it was necessary, and
I still hold that those conditions or their
doing that is really unwarranted.

The rate of money increase right
now is well within the guidelines set by
the Federal Reserve and it's commen-
surate with our increased growth, and
yet it is not at a point that would add to
inflation. So I am still optimistic that
those interest rates — we're going to see
them continue to come down.

As for the deficit, I'm also going to
be optimistic and tell you that I think
that everyone has been overestimating.
Not that it isn't a serious problem — it is.
But I think that they've been
overestimating the amount in the
outyears in the projections of what the
deficit will be.

Q. Are you concerned about the
Irish demonstrations?

A. Oh, the Irish demonstrations, I
think that's just Irish hospitality. They
•know — [laughter] — that I haven't gone
anyplace in years that there hasn't been
a demonstration, and they don't want
me to feel as if I'm not at home.

Q. Your Administration has said
that once we build up our military
strength, the Russians would have an
incentive to come to the negotiating
table. You have said that we have
built up our military defenses. Why
have the Russians not returned to the
negotiating table?

A. As I say, maybe they're waiting
I for the election to be over. But, no, we
have built up. On the other hand, they
pan see, for example, the modernization
of our strategic weapons, which are all
I mportant — the Peacekeeper, the
(MX — they can see the contest that is go-
ing on as to whether that's going to be
touWt or not. And this can't help but be
i encouraging to them.

But I think it's true they came to the
table, and I think they only came to the
table because they believed in our deter-
mination to continue our military
buildup. And they left because their
whole propaganda campaign against the
deployment of the Pershings and the
cruise missiles in Europe — which was
agreed to in 1979 by this country, when
NATO requested it, and we're keeping
that promise — but at all the time that
they were negotiating with us, they kept
on building and adding to their stock of
SS-20s. Now, these are triple warhead
missiles that are intermediate range,
targeted on all the targets of Europe.
But also, they have been adding them
aimed at targets in Asia. And it was for
this — in response to this— that NATO
asked for an intermediate-range weapon
that could be based in Europe, targeted
on Russia. And we're providing that. It
won't in any way, match the 1,350 or so
warheads that are in the SS-20s, but we
believe it will be enough for a deterrent.

Use of a deterrent is to have the
enemy know that if he's contemplating
some rash action, the cost to him might
be more than he cares to bear. So, we're
going forward with this. They had
waged such a campaign to stop it that I
think they made this other move to,
hopefully — or in the hope that our allies
in Europe might change their mind and
cancel out their request. The allies stood
firm. I don't think the alliance has ever
been more solidly together than it is
right now.

Q. But given the coolness of our
relationship right now, do you think
the Russians have a problem of saving
face, perhaps, in returning to the
negotiations? If so, would you be
prepared to offer some gesture, to
make some overture that would be
that positive sign that they asked for
in order to come to the table without a
loss of face?

A. I don't think it would be proper
for us to do something, some conces-
sions that would make it look that we
rewarded their intransigence and their
walking out of the meetings. But we
have pursued — and we took the lead in
this— negotiations on a number of other
matters between our two countries that
have nothing to do with strategic
weapons, and we've been making some
progress in a number of those negotia-
tions. I don't think things are as bad as
they're being painted.

Q. You said earlier that if asked,
the United States would assist Persian

Gulf States in keeping the Strait of
Hormuz open. Are there any cir-
cumstances where American interests
could be so threatened that the United
States would act unilaterally or
without a request from those states?

A. Again, I can't foresee that. We
probably would be — among all the
importing-of-oil nations, we would be the
least hurt by any shutdown. It is our
allies — it is Japan, it is our friends in
Western Europe — who would really be
in trouble if there was any stop to the
Middle East oil.

Actually, only 3% of our oil supply
now — thanks to decontrolling oil and in-
creasing domestic production — only 3%
is involved in the Persian Gulf for us.
And we have increased our stockpile of
oil to four times what it was when we
came here. I can't see a kind of an
emergency that would do this.

But also remember, we are in con-
sultation with our allies, with those na-
tions that would be affected, because
we're not contemplating anything
unilaterally here. This problem is one
that affects all of us.

Q. What would the United States
do to help its allies in the event of an
oil cutoff? Would we give them oil
from the strategic reserve?

A. We have had people in consulta-
tions with our allies, and they've been
holding meetings on discussing con-
tingencies of this kind. We would not
hold back on immediately turning to our
reserve, but I'm not prepared to say
we've made any specific plans.

Q. The White House and the Pen-
tagon worked very hard yesterday to
tell people they shouldn't really worry
about the new nuclear missile sub-
marines the Soviet Union says they've
placed off the American coast. Can
you tell the American people that
these new missile subs are not any
cause for concern, and is there
anything the United States must do to
respond to the Soviets?

A. If I thought there was some
reason to be concerned about them, I
wouldn't be sleeping in this house
tonight. [Laughter] No, this isn't really
anything new. They're announcing and
they're publicizing, but those submarines
off both our coasts — they've had sub-
marines in and out and patrolling there
for extended periods of time. Maybe
there's one or two more than have been
there at one time in the past, but I
think, again, it is in keeping with their
talk about us putting the Pershings in

July 1984

THE PRESIDENT

Europe and that they're now going to
show us that they can do something in
return if we do that. They have the sub-
marines offshore. But they're — no, I
don't think they pose any particular
threat at all.

Q. If it's any consolation to you,
I've written all my relations in County
Kerry not to demonstrate seriously un-
til you and I are safely out of the
country. [Laughter] But I wanted to
ask you if you have any message for
the Soviet Government or for the
Sakharovs about the possibility of get-
ting them out of the coun-
try— whether there's any deal or any
trade that can be made that would
save their lives?

A. On this one I have to say we're
as concerned as anyone — deeply con-
cerned. Mrs. Bonner has a very serious
heart condition. She is a physician
herself. She's a war hero also. She was
wounded three times in World War II.
She was permitted to leave Russia once
and had medical treatment for her prob-
lem outside the country, and I think it's
only natural that someone would want
to go back to the person who had
treated them before.

But I can't go further than that,
because this is a little bit like when I put
a moratorium on myself before I was
here in talking about our people in the
Embassy in Iran. I just have a feeling
that anything I might say publicly could
be injurious to her chances. I just hope
and pray that the Soviet Union will do
the humane thing and let her go.

Q. You have said in the past that
you have no intention of sending U.S.
troops into combat in El Salvador, and
President-elect Duarte said yesterday
that he had no intention of asking for
U.S. troops to go there. But despite
these denials, the doubts linger.
Walter Mondale insists that your
policy will lead to U.S. involvement
down there. Can you say unequivocally
tonight that you would not send
troops down to El Salvador, even if it
appears that without them El Salvador
might fall to the communists.

A. First of all, President Duarte
made it very plain that they would never
request American troops. We have
never had any consideration of doing
that or any thought of doing that at all.
I don't know how I can convince anyone
that — but all you'd have to do is look at
all our friends and neighbors in Latin
America, and probably as a holdover
from the past, we'd lose all those friends

and neighbors if we did that. They want
our help. They know they have to have
our help, economically, and in the man-
ner in which we're giving it in military
support — by training and supplies and
equipment and so forth — but they don't
want American manpower there.

Q. If El Salvador clearly were go-
ing to fall to the communists, would
you feel it's in the U.S. interests to
send our troops in there and stop that,
or would you allow the country to go
communist?

A. You're asking me for a hypo-
thetical question, and one in which that I
think that I would be very foolish to try
and answer.

Q. I was wondering if you could
give us your definition of "holding
firm" in answer to Charlotte's
[Charlotte Saikowski, Christian
Science Monitor] question. You said
our allies in Europe were holding firm
in accepting missiles, yet the Dutch
Government here is going through a
little rain dance here because their
people don't want to take the new
missiles. Could you sort of tell me
how that is holding firm?

A. The decision must be made by
the Dutch Cabinet — Cabinet of the
Netherlands— and the Parliament, and
they have not yet taken up that issue or
made a decision on it. They are slated to
get some cruise missiles there. But in
the other countries, basically, Italy, Ger-
many, the other NATO countries, are all
going forward; England, the bases are
being erected for the missiles, including
the Pershings and, as I say, not just on
that issue alone.

But I have to tell you that some
time ago when we came here we found
there was disarray in the NATO
alliance, and that no longer holds true
today. I think we're closer than we've
probably ever been.

Q. If the Dutch Government
reverses and changes its mind, are you
fearful that'll set up a chain reaction
among the other allies, where the
situation is at best tenuous?

A. No. I doubt that they would.
There might be another country or so
among some of the smaller allies that
might follow suit, but the rest, you can
rest assured, wouldn't.

Q. You said a little while ago that
you felt that the world was a little
more secure place since you've been in
power. How do you account for the
fact that so many people in so many
countries think that during the last

3V2 years the world has moved closer
to war, rather than closer to peace?

A. I would say that that is because
that's all that most of the people have
been hearing in political dialogue from
one side, since we've been here in the
3V2 years, that I somehow have an itchy
finger and am going to blow up the
world. And that has all been duly
reported by so many of you that that is
the tone that the people have been get-
ting. And it doesn't do me any good to
tell you that, having seen four wars in
my lifetime. I don't know of anyone, in
or out of government, who is more
determinedly seeking peace than I am.
And my goal is the total elimination of
nuclear weapons. If we can get those
fellows back to the table and get them
to start down that road of mutual reduc-
tion, then they might find out what com-
monsense it would mean to eliminate
them.

But I would also point out, that if
we're that dangerous in 3V2 years, why
is it that while the Soviets are still
carrying on in Afghanistan and backing
the forces in Kampuchea — the North
Vietnamese forces there — but all those
gains that they were making in the few
years before we came here — Ethiopia,
South Yemen, Angola — all of those
things, they haven't taken another inch
of territory since we've been here.

Q. I think what the ordinary per-
son is seeing is that the United States
is rearming heavily, the Russians are
rearming heavily, and the ordinary
person says, "What is going to be the
outcome of this arms race? Nobody is
at any table."

A. No, it is as simple as this, the
Soviets — this isn't new for them, they're
up at full pitch. I doubt if they could ex-
pand their military production anyplace
beyond where it is right now, or the rate
that it is.

On the other hand, they know that
when for the first time in, as I say,
decades, they see us determined to
refurbish our defenses, they know that
they can't match us in — if there is such
a race, which means that the only alter-
native for them is to watch us catch up
or to sit down at the table with us and
work out something in which they won't
have to run the risk of someone being
superior to them militarily.

JUNE 14, 19842

One week ago today in London, I joined
the leaders of six major industrialized
democracies for the annual economic
summit. And we met to take the pulse

Department of State Bulletin

THE PRESIDENT

of the world economy, to measure the
impact of the policies that we've been
implementing during the past 3 years,
and to continue strengthening the
freedom, prosperity, and peace that we
share.

Change comes neither easily nor
quickly in foreign affairs. But there was
recognition in London that, while we
continue to face pressing challenges, we
are on the right track. By working
together, by sticking to our policies,
we've made impressive progress since
1981. The Western democracies have
been moving from weakness to strength,
from disappointment and pessimism to
confidence and hope for a better future.

In 1981, our economies had an
average growth of only 1.8%, and 8.5%
inflation. But led by the recovery, and
now the expansion in the United States,
our average growth today is up to 4%,
while inflation has been cut in half.

There was recognition that the in-
centives of America's recovery program,
which sparked our economic takeoff and
the creation of more than 6 million jobs
in the last 18 months, have made a ma-
jor contribution to the improvement in
both the performance and the outlook in
the world economy.

I reaffirmed to our allies America's
bedrock commitment to the NATO
alliance and to its mission to protect
peace and freedom in the West. Europe
and America have enjoyed nearly 40
years of peace. If NATO remains strong
and unified, and I believe NATO is
stronger and more unified today than
ever before, then Europe and America
will remain free and secure.

We have reestablished strength and
confidence stretching beyond America's
shores to Europe and the Pacific Basin,
and we're trying, as well, to promote a
better, more realistic, long-term rela-
tionship with the Soviet Union. And
that's why we, and our allies, have made
30 many initiatives to reduce nuclear
arsenals, ban chemical weapons, break
i the impasse in the East- West conven-
I tional force negotiations, curb nuclear
oroliferation, and reach agreement on
proposals for increasing confidence and
reducing the risk of surprise attack in
Europe.

The West is doing its utmost, but to
iate, we have met with continued Soviet
inwillingness to return to the nuclear
arms negotiating tables. America's
standing taller in the world today, but, if
we're to continue on course toward a
-nore prosperous peaceful world, we
leed the full cooperation of the Con-
gress. The Congress must support our
strategic modernization program to keep

July 1984

America strong and convince the Soviets
it is in their best interest to choose the
course of negotiation, not confrontation,
so we can safely reduce arms while
preserving peace and stability.

The Congress must pass the recom-
mendations of the bipartisan commission
on Central America and the two sup-
plemental requests now before it to pro-
mote industry, economic development,
and greater security in that vital region
to our south.

And the Congress must promptly
pass our deficit-reduction program to
help ensure that our economic recovery
remains strong.

Q. No matter what you say you've
done so far, two Republican leaders
don't think you've done enough and
they are urging you to hold regular
summit meetings, for fear well blow
each other up, with the Soviets
without any conditions as to issues or
outcome. Both you and the Soviets
have said you will go to a summit, if
it's carefully prepared. My question is,
where do we stand now? Are you will-
ing to go for a summit, start the ball
rolling?

A. In the first place, with regard to
the two Senators, and I did talk to
them, they were talking about a goal
that would be desirable that I think we
all share. And we were agreed on that
and I told them some of the difficulties
and problems that we've been having.
But, yes, I am willing to meet and talk
any time. So far they have been the ones
not responding, but we have kept in
communication. There are a number of
issues other than arms reductions that
we have suggested talking to them
about and we're going to continue in the
area of quiet diplomacy to bring that
about.

Q. Are you going to make an af-
firmative move for a summit and to try
to clear away some of these stumbling
blocks that have really caused great
East-West tensions?

A. This is what I meant with my
remarks, that we are continuing to keep
communication with the idea leading
toward that very thing.

Q. Do we understand you to say
that you're willing now to drop your
long-held view that a summit would
have to be carefully prepared in ad-
vance and hold a prospect for
reasonable success?

A. It wouldn't really be necessary
for me to drop that, since the Russians
say that that's exactly what they feel
must happen before there can be a

meeting, that it must be carefully
prepared and— let me explain, maybe, a
little more fully what, when I say that,
what I have in mind. There've been a
couple of times in the past in which
representatives from the free world and
from our own country have gotten into
things simply to get acquainted or say
hello, and they have led to great expec-
tations and they've led to great disap-
pointment. And I don't think that we
ought to go into something of that kind.
But at the same time, I'm not talking
about a preconstructed meeting in which
you've got a list of points. You can have
an agenda in which it is the general area
of the things that you think could lead to
better understanding. And that's good
enough for me.

But right now, we're getting a
response from them that they want a
very carefully prepared agenda. If they
agree with me that there are things we
can talk about that might clear the air
and create a better understanding be-
tween us, that's fine.

Q. Are you willing to take steps
now to begin the process of working
on an agenda so that a summit could
ultimately occur?

A. We are taking steps. This is what
I mean by quiet diplomacy. And I have
been in communication, myself — written
communication — with the Soviet leader-
ship.

There is one thing that I think — I've
said this before, but I think many of you
fail to recognize, and that is, there have
been three Russian heads of state since I
became President. One of them I knew
personally. The second one was, we now
know, in ill health because he was vir-
tually incommunicado to anyone during
this period. And now this newest one is
setting up an administration, and so
forth, so it isn't as if we've been sitting
here for 3V2 years arguing with someone
or not arguing with someone. There
have been a lot of changes over there.
But we're ready, willing, and able.

Q. In recent speeches this year
about the Soviets, you have held out
an olive branch to them. But, at the
same time, you usually either de-
nounce their system or their actions.
Would it be better, in an attempt to
get this dialogue started again,
whether at the summit or back in
Geneva, if you simply held out the
olive branch without also taking a
shot at them?

A. I don't think I've gone out of my
way to just call them names or anything.

THE PRESIDENT

I've usually pointed to something that is
counter to their protestations of wanting
peace and cooperation, such as walking
away from the arms talks. I don't think
that I've said anything that was as fiery
as their referring to the funeral service
for the Unknown Soldier as "a
militaristic orgy." If we're going to talk
abut comparisons of rhetoric, they've
topped me in spades.

Q. I don't know if everyone else is
left as unclear as I am on where we
stand with a summit with the Soviets.
Are you inviting Mr. Chernenko to
come and have a summit with you?
And are you willing to have your ad-
visers sit down with his advisers to
work out the preplanning that you
both say is necessary?

A. We have been in contact with
them on a number of issues that we
think— bilateral issues that should be
discussed between us. Of course, there is
a matter of the arms talks, also,
although we've not been talking about
that since they have simply walked
away.

All I can tell you is that, in what I
call quiet diplomacy, we are in contact
with their people trying to establish a
basis for talks.

Q. Is this an invitation?

A. We haven't reached that point
yet.

Q. There seems to be a change or
something that we have at least not
known before. Your communication
with the Soviet leadership, has that
been with Mr. Chernenko, and has the
subject been a summit — a meeting be-
tween you and Mr. Chernenko?

A. No, much of the communication
has been simply on the broad relation-
ship between our two countries. And my
communication, by writing, has been
with Mr. Chernenko.

Q. Would you be willing to meet
with Mr. Chernenko even if he won't
send his delegation back to the
nuclear arms talks?

A. Yes, yes, I'm willing to meet with
him.

Q. You have said recently that you
think that U.S.-Soviet relations would
improve in a second Reagan term. But
several other people who have been in
Moscow quote officials there as saying
that isn't true, that they're not going
to ever deal with you. They feel you
have been too harsh. What hard
evidence do you have that relations
would improve after the election?

A. I've been too harsh — maybe if I
apologize for shooting down the KAL
747 and some things like that then
maybe they'll warm up and be willing to
talk.

No, I think it's very obvious that —
and I wouldn't expect them to do
anything that might help me in the com-
ing election. I think when it's over and
they know that 4 years lie out ahead, if
I'm here for 4 years, I think they'll talk.

Q. Do you think that the Soviets
could get a better deal from your
Democratic opponent than they could
from you?

A. Oh, I'm not going to comment on
that. [Laughter.]

Q. As I recall, one of your
previous formulations about a summit
was that you would have to have
something concrete to show for it. Are
you willing to have a summit that does
not have a concrete agreement or
piece of paper like the new SALT
[strategic arms limitation talks] or
START [strategic arms reduction
talks] treaty or some — or a new ini-
tiative toward a SALT or START
treaty?

A. I've never thought about in a
specific — of that kind. As I've said,
there should be an agenda, a subject
that both sides want to talk about and
have some desire to get a settlement.
And that holds out the promise then
that something might be accomplished.
When you don't plan that well, if I could
recall, and I don't mean this to be
critical of my predecessors, but there
was a get-acquainted meeting with
Lyndon Johnson and it was nothing
more than that. Then there was a
meeting with Kennedy and Khrushchev
and it didn't ease tensions or make
things any better. This was the meeting
in Vienna. It led to even more strains.

So, it is a two-edge sword — such a
meeting. Yes, you want to accomplish
something but you want to be sure that
you aren't going to lead to more trouble.

Q. My point was you're willing to
have a summit that does not end in the
signing of a treaty on arms control?

A. Oh, yes, I've said that once
already here.

Q. What is your timeframe on this
if you are now willing to negotiate the
possibility of a summit? Do you think
it could be held before the election?

A. Whenever the conditions that
lead to having one would be fine. But
one thing— let me say and make
clear— I'm not going to play political

games with this subject and go rushing
out for some kind of political advantage
to announce that I have asked for a
summit meeting. That wouldn't do either
one of us any good, and certainly
wouldn't be fair to them.

But, this is legitimate. The door is
open. And every once in a while, we're
standing in the doorway, seeing if
anyone's coming up the steps.

Q. What's your estimation on a
timeframe?

A. I couldn't give you one.

Q. Some of your advisers are say-
ing privately that the Soviet leader-
ship now is actually so divided and
uncertain that there's really not much
hope of progress at this time; and you
seem to hint that when you say that
there 've been three leaders since
you've been in office. Is that your
view? And what are the implications
of that?

A. We don't know. There's been the
theory advanced that they're kind of
marking time, and, perhaps, in some
disagreement about what course they
should follow. But, there's no way to
know that. So, we'll just keep on trying.

Q. Today the chief Kremlin
spokesman said, "We want to have
negotiations with the United States on
a whole complex of issues," which is
certainly something different than Mr.
Chernenko said the day before. Do you
read this as a change in Soviet policy
or tactics? Is there something going
on there that is happening very quick-
ly in relations between our two coun-
tries?

A. We'll take a chance on finding
out on that, because, as I say, we are in
communication. And, if they're ready to
talk, we are too.

Q. You said tonight that you're
ready and willing to talk to the
Soviets. But Mr. Chernenko has pro-
posed negotiating a ban on anti-
satellite weapons and other space
weapons. Can you tell us why, beyond
the fact that you believe there can't be
verification, as you said last weekend,
why can't verification be negotiated
once you sit down with the Soviets to
discuss those weapons?

A. There are a number of things,
and we are studying that. We don't have
a flat no on that yet. We're studying
that whole situation.

Department of State Bulletin

THE SECRETARY

The Soviets are way ahead of us in
that field. They've been at this for about
10 years or more. And we are just in the
field of beginning research. And I think
we've got some definite reasons there
for wanting to know our way before we
talk. But we haven't slammed the door
on that at all.

Q. Can you also confirm reports
about the verification issue, that there
has been significant Soviet violations
of all of the treaties going back to
1958?

A. We turned over a 200-page
report to the Congress that was
classified. We made public a summary of
that, declassified in a summary. The
other lengthy report is still classified
because of the risk of exposing sources.
But it was a report on outright viola-
tions of many of the treaties in the past,
and also some ambiguities in which —
maybe based on language differences or
not — they claim a different interpreta-
tion of the treaty and that, therefore,
they're not violating it. They're doing
what they think the treaty prescribes.
But between those two things, yes,
there have been those violations.

Q. Before you came along, in re-
cent years, the talk had been between
the two governments of parity in force
between the United States and the
i Soviet Union. Your supporters who
wrote the 1980 Republican platform
■ called for military superiority over the
i Soviet Union. It's been a little bit
fuzzy since, although you, in a couple
of speeches, I think, starting with the
. "star wars" speech, have gone back to
using the parlance of parity. How do
you feel the Republican platform this
year would handle that issue? And
between those two key words,
"superiority" and "parity," where
should that platform go and your Ad-
ministration go?

A. My own view is that we should
i maintain the strength and deterrent that
J is necessary to assure, as much as you
II :an have such assurance, that there
won't be a confrontation because the
I price would be too high, but, at the same
i 1 time, emphasizing that we want more
"Ichan anything else to join with them in
' I reducing the number of weapons.

We've had arms limitation dealings
land treaties and so forth, even such as
j:he SALT treaties. All of those simply
I egalized an arms race. There were
J imitations or rules and regulations as to
jiow many more weapons you could
liave.

As a matter of fact, the Soviet
tfUnion added almost 4,000 warheads

after the two sides had signed the
SALT II agreement. That's not my idea
of what we really need if we're to reduce
the tensions in the world. What we need
is to reduce and, hopefully, to eliminate,
the strategic nuclear weapons.

Q. You're on record, and I think at
least twice, as saying that we do not
seek anything more than parity in the
long run. Would not a platform that
goes further than that and repeats the
call for superiority give a wrong
signal to the Soviet Union?

A. I would prefer that we not ask
for superiority now that we've entered
into and started this whole area. We are
negotiating with them with other coun-
tries in two negotiations that are going
on that they did not leave or walk away
from. And, yes, I believe that it could be
counterproductive now to ask for that.

'Text from Weekly Compilation of
Presidential Documents of May 28, 1984.
2Text from White House press release.

A Steady Course for
American Foreign Policy

Secretary Shultz's remarks before the
Business Council in Hot Springs, Va.,
on May 12, 198J,.1

Of all the credits in my resume, there
are none I am more proud of, and none
more meaningful, than my years in
private business. The distinction be-
tween "public service" and "private
enterprise" is in many ways an artificial
one. I believe there is no more impor-
tant service rendered to the American
public than that of the business com-
munity— in terms of productivity, pros-
perity, leadership, and systematic
development of our nation's material and
human resources. So I'm pleased that
you've invited me here today, and proud
to number myself among you — as a
"public servant."

Three Foreign Policy Principles

As the President has been saying for the
last 3 years, our foreign policy is based
on three principles: realism, a will-
ingness to negotiate for fair solutions,
and strength.

Realism is self-explanatory. We try
to see the world as it is, not as we'd like
it to be. This is a basic principle of
business. If you kid yourself about your
competition or about your own abilities
or about where the market is, you're
likely to fail. It's the same in foreign af-
fairs. We call a spade a spade; aggres-
sion is aggression and oppression is op-
pression, whether in Poland,
Afghanistan, southern Africa, or Central
America.

Secondly, we prefer to pursue our
objectives peacefully, through negotia-
tion, whether it's arms control or peace
in the Middle East or Central America.
That's what we've been doing with the

Soviet Union, off and on, for the last 10
years. In the Middle East, for at least 15
years, we have sought to bridge dif-
ferences and find reasonable solutions
that advance everyone's interests. In
Central America, a similar search for
broad, peaceful solutions had led us to
support the regional negotiations known
as the Contadora process.

Our experience in negotiations has
proved the centrality of our third basic
principle, the importance of strength.
We use our power not to dominate the
world, but to prevent others from
dominating it. No diplomatic strategy
ever succeeded from weakness. If the
other side believes it can gain more by
seeking to achieve its objectives
unilaterally than by compromising, that's
what they'll do and diplomacy probably
will fail. So willingness to negotiate
must be backed up by strength. When I
say "strength," I don't refer only to
military strength. That's essential, of
course, but it's only one form of
strength. A strong foreign policy
depends equally on economic strength,
powerful alliances, standing by friends,
domestic unity, and an old-fashioned
strength called "preseverance."

Guided by these principles, President
Reagan has set our foreign policy on a
steady course. We have restored the
foundation of military deterrence, both
nuclear and conventional; we have rein-
vigorated the U.S. economy, an essential
prerequisite to global economic recovery;
and we have renewed our national self-
confidence. We are effectively defending
our national interests, promoting inter-
national peace and stability, and
strengthening freedom and democratic
values.

July 1984

THE SECRETARY

East Asia

Let me start my survey with East Asia,
where our relations are now the
strongest they have been in this century.
Nothing explains our deep interest in
East Asia better than two facts. First,
for the last several years, our trade with
that region has been greater than with
any other region and is expanding at an
accelerating rate. Second, our national
security is directly affected by what hap-
pens in Asia. Most of the countries in
the area want our cooperation in con-
taining Soviet and Vietnamese expan-
sionism.

Our relationship with Japan is very
close, in spite of some tough trade
issues, which themselves are a testimony
to the complexity and maturity of our
relationship. In the 6 months since the
President visited Japan, we have worked
hard on solutions to those problems,
demonstrating that what unites us is far
greater and far more important than
what troubles us. Indeed, many people
refer to our ties with Japan as "the most
important bilateral relationship in the
world," and they may well be right.

After Premier Zhao's visit to
Washington and the President's trip, we
believe that our relationship with China
is now on a stable, pragmatic track. It is
based on a convergence of many in-
terests and is no longer subject to the
exaggerated hopes and sharp disillu-
sionments that have marked the rela-
tionship in recent years. In spite of our
continuing ideological differences and
divergent viewpoints on some issues, the
President received a warm and en-
thusiastic welcome. His rapport with
China's leaders was excellent. During his
visit we concluded several new
agreements with the Chinese, including
one on peaceful nuclear cooperation and
a tax treaty that should greatly
stimulate U.S. investment in China.

What the China visit proved, above
all, is that the United States can main-
tain cooperative, mutually beneficial
relations with a society that is
ideologically very different from ours.
Our relationship with China shows that
two societies can find common interests
amid their differences. That is our ap-
proach and that is our preference.

Soviet Union and Arms Control

It is our approach and preference also
with respect to the Soviet Union. The
Soviet Union, however, has lately been
behaving in a manner that suggests that
it has some difficulty accepting that con-
cept.

The Soviets' decision to boycott the
Los Angeles Olympics was completely
unjustified; it surprised and clearly
dismayed even their closest allies. The
allegations on which they ostensibly
based their decision were flimsy and
false. The United States had fully met
its obligations under the Olympic
Charter. In fact, we bent over
backwards to meet the Soviets'
legitimate concerns and had met them.
For example, they had been assured
there would be no demonstrations in
Olympic facilities and villages or near
their ship. We even allowed Aeroflot
charters. Some 17,000 people will have
security-related duties in Los Angeles;
the U.S. Government has committed $50
million to provide Federal support for
Olympic security.

So it is hard to say why they made
their decision. Furthermore, this isn't
the only recent case where their
behavior is troubling. They have reacted
to the efforts of Andrei Sakharov to
assist his wife's travel abroad for
medical treatment by cutting off this
world-renowned scientist from the out-
side world, bringing false charges
against his wife, and even refusing to
allow her to go to Moscow. This great
man's life is being trifled with, and the
whole world must be concerned. I should
also say that their accusations against
our people in Moscow on this subject
were totally false, and the Soviets know
it.

We've seen the same kind of thing in
our arms control negotiations. In the
talks on intermediate-range nuclear
forces [INF] for example, the Soviets
resisted our proposal to eliminate those
weapons altogether; they wanted to re-
tain their monopoly of INF missiles. At
the same time, they used intimidation,
threats, and a massive propaganda of-
fensive to try to prevent our allies from
rectifying the imbalance by deploying
INF missiles on their own territory.
When their efforts failed and the
deployments went ahead on schedule
last December, the Soviets just walked
out of the INF talks — permanently, they
say — and suspended the START
[strategic arms reduction talks] negotia-
tions indefinitely. Here again, their
reasoning doesn't make sense. When we
deploy a few missiles, they walk out.
But in the preceding 2 years, they
deployed more than 100 missiles with
300 warheads, while we deployed
none — yet we continued to negotiate.

Perhaps the Soviets think that by
this kind of behavior they can sow fear
and cause a failure of Western will, thus
relieving the U.S.S.R. of the need to

make accommodations at the negotiating
table. Whatever the specific motives, the
pattern seems to be that whenever the
Soviet leaders meet with frustration or
come up against hard decisions, they
choose to do things that isolate them
and their peoples from the rest of the
world community.

In mistreating Sakharov, they are
isolating themselves from the world's
scientists. In abandoning nuclear arms
negotiations, they are isolating
themselves from all who seek genuine
reductions. In the Olympics case, they
are also trying to drag their allies into
isolation with them. And they just called
off a scheduled high-level meeting with
the Chinese.

We, for our part, will stay on
course. We will continue to shape our
foreign policy on the basis of realism,
strength, and a willingness to negotiate.
We are ready to resume the dialogue
whenever they are. Our policy is consist-
ent and constructive.

The process of reengaging the
Soviets may be slow, and we will need
to be patient. But we will be in a strong
position to defend our interests and
those of our friends and allies in any
case. In the meantime, Soviet adven-
turism is being checked. In fact, the tide
of communist encroachment in the Third
World, from Grenada to southern
Africa, has begun to recede.

The Western Alliance

A key to the effectiveness of our Soviet
policy has been the cohesion of our
alliance with Western Europe. NATO
has successfully confronted its greatest
challenge of the last decade. With the
successful initiation of INF deployment,
NATO is assuring a firm linkage be-
tween American power and European
security for the rest of the century.
While still giving top priority to securing
arms control agreements on inter-
mediate and strategic nuclear weapons,
the alliance is now turning to other
priority issues. There is widespread
agreement on the need to take steps
now to strengthen NATO's conventional
defense. There is similar agreement on
the need to put East- West relations on a
firmer, more positive footing. And final-
ly, there is widening awareness of our
need to improve Western consultations
on challenges beyond the European area
and to cooperate more effectively to de-
fend and promote Western interests in
these regions.

Latin America

In Latin America, our policy has been to
encourage democratic evolution and to

Department of State Bulleti

THE SECRETARY

help governments seeking to promote
peaceful democratic change in the face
of strong, often violent opposition from
both the far left and the far right.
Although we, of course, cannot take all
the credit for it, the fact is that a
democratic revolution, touching 90% of
the region's population, has been taking
place throughout Latin America. Since
1981 four important countries, most
recently Argentina, have moved from
military rule to elected civilian govern-
ments. Brazil, the region's largest coun-
try, is now firmly pointed in that direc-
tion. Just last Sunday, democratic elec-
tions were held in Ecuador, Panama,
and El Salvador. It was an exhilarating
moment for democracy.

Our policy is working, but the going
isn't easy. The elections in El Salvador
took place despite active efforts by com-
munist guerrillas to disrupt them. But
the people of El Salvador and of all Cen-
tral America are determined to build
democracy and preserve freedom — and
we are determined to keep helping
them, despite the obstacles. Because
what happens to Central America is of
enormous strategic and political impor-
tance to the United States.

People talk about analogies between
Central America and Vietnam. I don't
see many parallels; Central America is
our own neighborhood. And as the
President said Wednesday night, we
don't have any plans to send American
troops into combat there. But if they in-
sist on pushing the analogy, and if
they're concerned about human rights,
they should look at what's happened in
Southeast Asia since the North Viet-
namese have taken over. And they
should look at the flood of refugees that
tragedy has produced — over half-a-
million in this country alone. Is that
what we want in Central America?

We want to see the problems of the
region resolved through diplomacy, so
we've strongly supported the efforts of
the Contadora group. But that effort
can't succeed unless the countries of
Central America are militarily and
economically strong enough to resist
subversion. That's why our assistance is
so important, and why it is vital that the
Congress make a real commitment, as
the bipartisan commission recommended
and the President requested. Our aid
must be consistent and predictable over
the long haul if it is to be effective.

Once the Sandinistas realize that
their clients in El Salvador can't win
militarily and that Nicaragua's own in-
terests can be achieved in peace and
democracy, I believe a diplomatic solu-
tion can be achieved. Then the countries

July 1984

of Central America can devote their
resources to economic development and
the building of democratic institutions.

Southern Africa

In southern Africa, we're facilitating
dialogues between South Africa and its
neighbors. This has already yielded
results. Mozambique has just signed a
nonaggression pact with South Africa
and is improving its relationship with
the West. Angola and South Africa have
entered into a process in which South
African troops are withdrawing from
southern Angola. Our goal is a regional
settlement that will provide in-
dependence to Namibia. South Africa
and its black African neighbors —
although they still disagree strongly
over South Africa's repugnant racial
problems — are all cooperating with this
effort. If this can be done through
negotiation, America's friends in the
region will be strengthened, and our
own national security interests will be
enhanced.

In South Africa itself we continue to
advocate peaceful change away from
apartheid and toward a more equitable
political and social system. American
business has played an important role in
South Africa's evolution through the
voluntary adherence of many American
firms operating there to the "Sullivan
principles," which have improved work-
ing conditions and opened new oppor-
tunities for black workers.

Middle East

Finally, we come to the Middle East,
where we have worked so long and so
hard to help our friends resolve the deep
differences among them and to defend
themselves against the enemies of peace
and freedom. These were the goals that
we sought in Lebanon and that we con-
tinue to seek throughout the region.
Although we weren't as successful there
as we would have liked, I think we
shouldn't put a period after the word
Lebanon. We should put a comma or a
semicolon at most, because when all is
said and done, most of the people in the
Middle East recognize that only the
United States has the necessary respect
and influence throughout the region to
serve as an honest broker and a
peacemaker. The important thing is that
we continue to stand by our friends and
resist the forces of state-sponsored ter-
rorism. If we do this, we will retain the
trust of reasonable people on all sides,
while they sort out their positions re-
garding next steps in the peace process.

President Reagan's September 1 ini-
tiative remains on the table. It is still
the only approach likely to meet the
most basic needs of all sides in the Arab-
Israeli dispute.

In the Persian Gulf right now, we're
facing a very dangerous situation. We've
remained neutral and have tried to use
our influence to bring the horrible
fighting to an end. But we've also made
it clear that if the fighting spreads to
directly threaten Western access to vital
energy supplies, we're prepared to use
American power to keep that lifeline
open.

Conclusion

What we need for a successful foreign
policy is not only military and economic
strength but also a sense of unity and
purpose at home. In the last 3 years,
President Reagan has brought us out of
a period, following Vietnam, when we
had lost those qualities and had suffered
accordingly around the world. Despite
disagreement over particular issues —
which are inevitable in a
democracy — there is a new unity and
sense of common purpose in our society,
grounded in our nation's commitment to
freedom and democracy. This unity has
provided great strength to America's in-
ternational position. And after this
week's elections in El Salvador, that
consensus should be even stronger.

Nevertheless, there are still linger-
ing traces of self-doubt and neoisola-
tionism that continue to crop up in our
national debate. Where issues of peace
and freedom are at stake, especially in
our own hemisphere, the United States
just can't be indifferent. Neither our in-
terest nor our friends' interests are
served by accommodating those who
prefer force over negotiation. As a na-
tion, we've got to be ready to defend
what we believe in, even when the going
is rough and the cost is high. We have
to be united, not only on our
values — which I believe we are — but
also on the determination to promote
and defend those values.

I have touched on a great many
problems in these few minutes, but I
don't want to leave you in doubt about
my belief in our country's ability to deal
with our difficult world. America is
back. American strength remains the
key to the survival of liberty on this
planet. With the President's leadership
and your continued strong support, I
know that the challenges before us will
be met.

^ress release 129 of May 11, 1984.

THE SECRETARY

Secretary Addresses American
Society of Newspaper Editors

Secretary Skultz's address before the
American Society of Newspaper Editors
and question-and-answer session with the
members of the audience on May 11,
1984.1

It is a special privilege, I know, for me
to address this group and to respond to
your questions and to engage in conver-
sation with you as the program goes on,
because you have such an impact on our
country. I think that as we survey the
problems of foreign policy and the op-
portunities for foreign policy — and there
are many of both — we know that we will
be able to proceed with them to solve
the problems and take advantage of the
opportunities best if we can proceed on
the basis of a reasonable unity in our
country and sense of cohesion and pur-
pose all over the country.

So the views that you have and the
way in which they're put forward around
our country are of central importance,
and I appreciate the chance to have a
whack at you here this morning.

As the President has thought about
the problems of foreign policy, and as I
have worked with him and talked with
him, he has basically proceeded on the
basis of three guiding ideas.

The first is that we must be realistic
about what's going on, not only in our
own country but all around the world.
The moment we start to kid ourselves
about what the situation really is, we're
going to get in deep trouble. We must
not only be realistic ourselves in what
we say to ourselves, but we have to be
willing to call the shots as we see them,
whatever may be going on. In other
words, we have to try to get other peo-
ple to be realistic too. So realism, I
think, is a first and fundamental point in
thinking about foreign policy or, for that
matter, anything else of importance.

The second idea that we have to
keep before us all the time is that as far
as the United States is concerned, we
want to be part of the solution, not part
of the problem. We believe in trying to
work things out. We believe in negotia-
tion. That's the best way to go about
solving the problems and taking advan-
tage of the opportunities, and we em-
phasize that. I don't say just in the
Reagan Administration. I think it's a
deep and honorable tradition in the
American way of approaching things,
that we try to help people work prob-

lems out and, as I say, be part of the
solution.

But finally, we know that we're not
going to get anywhere if we don't have
strength. And, obviously, this must in-
clude a proper capacity to defend
ourselves and defend our interests and
defend our values, but it has to go fur-
ther than that. We must have economic
strength to draw on; and we must have
that strength of purpose in our country
and confidence that what we stand for is
right, and what we're trying to do is
right, and that purposefulness that
comes from a sense of conviction about
what you're doing.

All of these things have been very
much on the President's mind; and, at
least in my judgment, he has made great
strides in bringing us a greater sense of
realism, a greater capacity to negotiate,
and a better sense of strength in all of
the categories that I have mentioned.

Let me just try to apply these
thoughts very, very quickly to three
areas. I could spend a long time going
around the world with you, so to speak,
but let me just pick out three critical
areas and comment very briefly on each
one, and then we can have some discus-
sion.

First, because it's important and
because we just got back from China, I'll
make a comment or two about China.

China

I believe the President's trip, and the
trip earlier in the year by Premier Zhao,
should be seen as a high point in a con-
tinuing process. A lot has come before; a
lot will come after. In a very real sense,
I think we can say that President Nixon
created the opening to China, President
Carter normalized our relationships with
China, and President Reagan has put
this relationship on a stable, realistic,
and comprehensive basis. The trip kind
of puts an exclamation point behind that
and, I think, shows that we are now
really on our way to a worthwhile rela-
tionship with the Chinese people and the
Chinese Government.

It is going to be a stable relation-
ship, I believe, because it is based on
realism. It's very clear that we have dif-
ferences in our systems and differences
of view about many things, but it's also
clear that we have many common in-

terests. So we proceed on the basis of
recognizing both these attributes of the
relationship.

I think the President's trip shows
how important this relationship is to
both countries. The range of agree-
ments, not only those that were signed
during the trip but those that pre-
ceded— and perhaps even more the
growing volume of exchanges between
people in the two governments, on a
commercial basis, on a scholarly basis,
student exchanges, cultural exchanges,
tourist exchanges — are growing very
rapidly. It shows the comprehensiveness
of this relationship.

And one more point. It is interesting
to see that this relationship has grown
between two countries which are very
different insofar as their economic and
political systems are concerned. It has
been possible for these two countries to
develop a working and worthwhile rela-
tionship, and that relationship has been
brought to its present, more recent
iteration by President Reagan, which
brings me to the Soviet Union.

I think the China relationship shows
what is possible and in a sense shows
what we would like to see. At the same
time, I want to assure you that as we
try to guide ourselves in our relationship
with the Soviet Union, we will be apply-
ing those three principles. We must be
realistic, we must be ready to work out
problems, but we must be strong.

I think we can take a lesson from
the Great Seal of our country. That has
been kind of interesting to me, to get a
little of the history of that that I hadn't
quite appreciated, because in these
wonderful antiques that we now have in
the State Department, there are a
number of old shields. In the old shields,
frequently, you see the eagle turned
toward the arrows. As you know, the
eagle is clutching arrows in one claw
and the olive branch in the other.
Nowadays, the eagle is looking at the
olive branch — and that was something
decreed by President Truman, that it
should be that way — standing for the
fact that the United States will always
look for peaceful solutions but in doing
so recognizes that we shouldn't let go of
those arrows.

I think that lesson applies very well
to the way we approach the Soviet
Union.

Soviet Union

We apply these ideas across a broad
range of issues, running from arms con-
trol to our differences of view about

Department of State Bulletin

THE SECRETARY

many regional problems — and let's not
forget about Afghanistan and Poland
and Kampuchea and other such places —
to bilateral relationships and the deep
problems of human rights that we
perceive coming out of Soviet behavior.
The most recent expression, in a sense,
is what is happening to Nobelist
Sakharov, being punished for trying to
bring about conformance with the
Helsinki accords, which were
presumably undertaken voluntarily by
the Soviet Union.

The Soviets know that we're pre-
pared for a reasonable and constructive
dialogue with them. We have said that
publicly, and we have said that private-
ly. We have a broad agenda on the table
that has got with it not just the inten-
tions, but many concrete aspects to it.
We are ready for give-and-take, but we
are not ready to give away the store.
That, perhaps, is their problem.

Right now we see the Soviet Union
engaged, in this continual process of
negotiation that we have with them, in a
tactic in the negotiation that involves
withdrawal, that involves a kind of scare
campaign, and that involves a sort of
deep freeze.

If we look at the negotiations over
intermediate-range nuclear missiles in
Geneva, here we see the NATO alliance
proceeding on a decision made in 1979. I
might note parenthetically, it is
sometimes said we don't have any con-
tinuity in our foreign policy. I think that
we have great elements of continuity in
our foreign policy, and our adherence to
NATO, and in this case the 1979 deci-
sion, is one of them.

As we sought to negotiate with the
Soviet Union and eliminate this class of
weapons entirely, the Soviet Union
deployed continuously. Yet when we im-
plemented the decision this year and
started the deployment of NATO
missiles, the Soviet Union took that as a
cause to withdraw from the negotiations
and they walked out.

In the INF negotiations, I would
point out to you that the positions taken
by the United States on behalf of the
alliance were the result of very exten-
sive consultation with our allies and
stood the test of reasonableness through
that consultative process.

Similarly, in the strategic talks for
reductions in nuclear armaments, our
positions on the table are reasonable and
interesting. They are bargaining-type
positions. But here, too, the Soviet
Union has chosen to walk out. Just as
for reasons that I think we can speculate
about but don't know, the Soviet Union
has chosen to walk out of the Olympic

July 1984

Games. They have said the reason has to
do with security, but that can't be the
reason because tremendous efforts are
being made and will continue to be made
by the United States to assure security
for the Olympics and a warm welcome
for the athletes.

That message, they have. We've had
lots of discussions with them. Basically
their concerns have been met, and so
the rationale of security just doesn't hold
up, and there must be some other
reason. I'll leave you to speculate what
that other reason might be.

At any rate, as far as we're con-
cerned, obviously we will not be in-
timidated. We have a strategy, we have
a course that we're on, and we will con-
tinue to be realistic. We'll continue to be
strong, and we will continue to be
reasonable and ready to sit down with
them whenever they are of a like mind.

Central America

Now, Central America. I think there is a
sense in which this can be a time of ex-
hilaration for us, because we see the
democratic process at work. Particular-
ly, if you've had a chance to talk with
any of the people who went to El
Salvador as observers, you can see what
a moving experience it was for them to
talk to people who are under great ten-
sion and who are looking to the
democratic process and the rule of law
to help them bring stability into their
lives so that economic development can
take place and things can be better.

There was a huge turnout, as you
know, and a result, quite clearly, in
favor of Mr. Duarte who has cam-
paigned on a democratic, rule of law,
human rights platform. El Salvador
deserves our support just as Central
America deserves our support. So in this
moment of exhilaration about the
democratic process, which is tending to
sweep through our hemisphere — a very
marked and gratifying development — we
also must have a mood of sobriety,
because we know that there are great
problems. There are great problems
right here in working out the form of
our support for our friends and coming
to understand that in Central America,
our vital interests are at stake, and we
have to stand up to that fact.

I think we have a good chance for
success in Central America if we can
stand in there on a steady course and be
strong, be realistic, and be reasonable,
and ready to negotiate. That is the
President's program, that is the pro-
gram of the bipartisan commission, and
that is the program that the House of

Representatives voted for yesterday —
that we should be in favor of democracy
and the rule of law and human rights;
that we should be in favor of economic
development and ready to help and help
people develop themselves; that we
should recognize that for those things to
take place there must be a security
shield against the obvious aggression in
the neighborhood; and that we have to
be ready ourselves and to help others in
a process of negotiation and reconcilia-
tion internally, and in the region as a
whole through the Contadora process,
hoping that that process and the 21
principles that it has evolved will be suc-
cessful.

I think that if we work at it and we
stay with our ideals and our principles,
we'll be able to succeed.

I could go on and talk about all sorts
of aspects of our foreign policy, but
overall I feel pretty good about it. I can
tell you that I'm proud to be the
Secretary of State of the United States
of America, working for our objectives
here in the United States; and, perhaps
particularly, when I travel around the
world and talk with my peers in other
countries and have a sense of the
respect they have for us, not simply as a
tremendous economic power or military
power but as a country which stands for
the ideals and attributes that people all
around the world aspire to.

Q. Would you expand, in connec-
tion with negotiation, on your
reference to the Contadora group? Are
we negotiating through them? Is this
a primary objective or is it secondary?
We get the impression from some of
the dispatches that we're pretty much
ignoring that group and have not
negotiated much with them.

A. Quite to the contrary. We
favored the establishment of that proc-
ess from the beginning because it in-
volves the countries which are there and
which are close to Central America. We
have seen it make progress, although
there are great difficulties.

We've seen the rhetoric of
Nicaragua change, although the behavior
hasn't changed, but at least the rhetoric
has moved. We've seen the Contadora
process evolve 21 principles or objec-
tives, which, if implemented, would go a
very long way to solving the problems.
We support those 21 objectives, and all
of the Central American countries have
said they do.

Translating general principles into
operating reality is tough, as we all
know. That is what they're trying to do,
and we support them in doing so.

THE SECRETARY

We've had two special representa-
tives of the President, ambassadors at
large, who have been named by the
President and confirmed by the
Senate — Senator Richard Stone and
now Ambassador Harry Shlaudeman.
These two men have made many trips to
the areas, have met with people in the
area when they come up here a great
many times.

Our present Ambassador, Harry
Shlaudeman, is our most experienced
Latin American diplomat. He's been an
ambassador in three countries. He's
been at it for about 30 years; a very sav-
vy guy, well respected in the region.

The reason why you may have the
impression that we haven't been active
is that we have tried to conduct our ac-
tivities of the ambassador at large quiet-
ly on the assumption that the best way
to help the process and help the Con-
tadora group along is not to be down
there jumping up and down and waving
our arms and acting as though these are
all the things that we are going to do
but rather be quietly helpful — respond
to them, go around and visit with them,
let them know what we are ready to do
and where we stand. And to do it in that
way, we believe, is the way to be effec-
tive even though it may not be the way
to attract the most public attention. But
effectiveness is the name of the game,
and that is what we are trying to do.

We are very much engaged and
behind the effort to bring forward, if it's
possible, a negotiated solution to the
problem. I believe we can say categori-
cally that it will only be possible if the
other side — the Soviet-Cuban-
Nicaraguan side — knows that they can-
not get their way by force of arms, and
we must remember that. It may be an
unpleasant fact, but it's reality. And as I
said at the beginning, we have to stick
with reality if we're going to get
anywhere.

Q. I want to go back to what you
said about the Soviet withdrawal from
the Olympics. You rejected the
reasons that they stated and you in-
vited us to speculate on the real
reasons. We usually get in trouble
when we do that. I would like to in-
vite you to give us what you think the
real reasons for the Soviet withdrawal
are, and what are the implications for
the future relationship between the
two countries?

A. Insofar as the last part of the
question is concerned, it is, I think,
clearly a part of the negotiating tactic,
in a sense — broadly conceived — that we
see in other areas. Just exactly what

motivated them, I don't know, and I
don't think it's particularly useful for me
to speculate. We see a lot of speculation
about that.

But as far as our relationship is con-
cerned, we will continue right on our
steady course which, as I've said, will in-
clude a readiness to sit down with them
on whatever are the appropriate topics
and have a reasonable dialogue and have
a discussion of genuine give-and-take.
But, as I also have said, the Reagan Ad-
ministration is not going to give away
the store. So we'll be reasonable; they've
got to be reasonable. And we'll continue
to be in that posture, and we can hope
that perhaps at some point they will
want to be in that posture too.

Q. May I say that I support
everything that you have said, but
there is one area that you haven't
touched upon, and that is the Middle
East. And I have been bothered for
some time about the question of what
our national interest is in the Middle
East. Why did we have a "peacekeep-
ing force," so-called, in Lebanon for
so long and waste so many American
lives on what appeared to be a futile
mission? What was our national in-
terest in remaining there? And do we
still have a national interest there?

A. We did have and we do have a
strong national interest in developments
in the Middle East, and the importance
of that fact is shown by the tremendous
amount of attention that has been paid
to the problems of the Middle East by
successive Administrations. The Middle
East, of course, is, first of all, a center
of three great religions. It's a cradle of
the religious roots that so many of us
have. The Middle East is a place where
there are huge energy resources on
which the West, in many respects, is
very dependent.

The Middle East is a place where we
have a close friend and ally in Israel that
has had to exist in an environment of
great hostility, and we want to support
the security and continued existence of
Israel. The Middle East is a place where
we have important, close friends in the
Arab world, and we need to maintain
our posture with them and help bring
about a peace process which must, of
course, address the Palestinian issues,
but other issues as well, in particular the
security of Israel. But we want to see a
peace process evolve into something
where at least a reasonable sense of
stability and continuity can be present in
that area, because of these important
aspects that I mentioned.

Lebanon was very much a part of
that process. Obviously, our effort in
Lebanon involved some risks, and we're
disappointed that it hasn't come out bet-
ter. But I think the appropriate punctua-
tion to put after the word "Lebanon"
right now is not a period — perhaps a
comma, but certainly no more than a
semicolon. We're very much engaged
there. All of the factions talk to our am-
bassador. They want us to stay there,
and we will stay there, in our diplomatic
presence and our readiness to help, to
bring about a sovereign Lebanon that is
compatible with security on Israel's
northern border. We hope it will develop
some pattern of interaction with all of
its neighbors including Israel. If that can
come about, it will help to enhance
stability in an area of the world where
the United States has great interests
and values at stake.

Q. It seems to have been a premise
of the Reagan Administration that for
this nation to develop major new
weapons systems — the MX being but
one example — it not only will increase
our military strength but will cause
the Soviets to be more negotiable on
arms control agreements. At this
point, can you cite any examples or
even any encouraging evidence that
would suggest that this strategy ac-
tually works?

A. I think, first of all, we have to
look at the modernization of the triad of
our strategic forces from the standpoint
of our ability to defend our interests and
values and to deter war — that's the pur-
pose. Great and important strides have
been made in the last few years to see-
ing that this modernization goes for-
ward, and the MX is a part of that. So
we don't develop our strategic triad for
the purpose of negotiations; we develop
it to deter aggression and to defend our
values — that's its purpose.

We also believe in a nuclear age that
arms control is of vital importance. In
fact, the President has changed the
words "arms control" — we're trying to
take it out of our lingo — and substitute
the word "reduction" for "control," to
get the numbers of these weapons
systems and the destructive power of
these weapons systems reduced. That's
been a shift in the way in which this sub-
ject has been approached. But it's a mat-
ter of great importance to us, and so the
Administration has put forward a very
broad range of arms control initiatives
and arms reduction initiatives, running
from chemical weapons to conventional
forces to nuclear forces and so on.

Department of State Bulletin

THE SECRETARY

We know that the process of
negotiating these matters with the
Soviet Union is a slow and arduous proc-
ess. If you look at the history of any of
the previous arms control accords, you
will see that they took a very long time
and that the Soviet Union tests you out
all the time — your resolve, your
strength of purpose. They try to divide
our country; they try to divide us from
our allies— that's part of the process of
negotiation.

Right now, I think the key to
negotiation is to demonstrate to
ourselves and to them that we do have
strength of purpose and willpower in
this country, that our relationships with
our allies are strong, and that at the
same time, whenever they are ready to
sit down and be reasonable about these
matters, we're there and we're ready to
work with them.

I think that is the approach that we
are taking — it's the right approach —
and I hope that in the end, they will be
interested in reductions in armaments.

But I would say one further thing:
Arms control or arms reduction talks
can't be loaded with too heavy a burden.
Remember that President Carter with-
drew the SALT II accords, which had
many other problems, but he withdrew
those from Senate consideration after
the Soviets invaded Afghanistan. In
other words, if we're going to get
anywhere with bringing greater stability
in this world, we have to address
ourselves to the broad range of issues,
including these regional problems, as
well as the problem of armaments as
such.

Q. We've heard from an ex-
President and an ex-Vice President on
Latin America in the last couple of
days, and strangely they said roughly
the same thing. Mr. Nixon said that
sometimes he feels the Administration
sees communists rather than Latin
American people or the problem of the
economy rather than of the military.
And Mr. Mondale, roughly, in a
political speech said essentially the
same thing. Could you give us some
specifics as to how the Administration
; truly sees other than a military solu-
tion to the problems of Latin America?

A. The solutions to the problems
have to emerge out of the right political
and social setting and a process of
economic development which takes place
in a way that gives widely shared
benefits. That's the fundamental of the
problems; that is the fundamental of the
President's program. If you read his

July 1984

speech last April to a joint session of
Congress, you'll see it all laid right out
there.

As for the business of seeing com-
munists under the bed, do you have any
doubt about what the Soviet Union's
system is? Do you have any doubt about
what is going on in Cuba? Do you have
any doubt about the flow of armaments
through that complex into Nicaragua? Is
there any doubt about what Nicaragua
has been up to? All you have to do is
read what they say and observe what is
going on. And so I think to stick your
head in the sand and say there is no
security threat in Central America is
stupid.

Certainly the solutions to these prob-
lems cannot be brought about by
military means. The military is not the
answer — it's not the answer to any prob-
lem. But unfortunately, in this
dangerous world we live in, having
military capability to deter aggres-
sion— not necessarily ourselves but see-
ing to it that our friends do in this
case — is a necessary, although not suffi-
cient, condition to bring about the
political reform and the economic
development that we want to see and
which we know is the real solution to
this problem.

Q. As you know, the President of
Mexico, I believe, is coming to
Washington next week. He's been
critical of us in a number of policies,
including our support of the Con-
tadoras. How do you see our relation-
ship with Mexico at this time? And
secondly, will part of the agenda be to
look at some of the specific border
problems ranging from sewage dis-
posal to immigration and the whole
gamut of things we have?

A. We have, basically, I think, a
very good relationship with Mexico.
We've worked at it hard, and they have
too. The President has made very
special efforts to emphasize the impor-
tance of our neighborhood — of Mexico,
of Canada, of Central America, of Latin
America generally, paid a great deal of
attention to those problems. We look
forward to President de la Madrid's
return visit following the President's
visit last summer in Mexico.

Our agenda, I'm sure, will be a
broad one. We have lots of interaction
between our two countries in terms of
the flow of people— Mexico is our third-
largest trading partner; we have a big
border and lots of problems along the
border. Inevitably, problems are
something that take place when there is
a rich, varied, and comprehensive rela-
tionship. So we'll discuss these bilateral

matters, I'm sure, in very considerable
detail. And as a matter of fact, just
before we went to China, Secretary of
State Sepulveda of Mexico was here. He
and I have a kind of home-and-home
visitation process, and we tried to go
through these and see where we stood
on many of these. So we'll have a lot of
discussion of those kinds of issues.

Certainly we'll discuss the problems
of Central America, because they are of
great importance to both countries; we
both have put a lot of effort and labor
into them. We don't see eye-to-eye on
everything — we don't see eye-to-eye on
everything within our own country — but
we'll discuss our differences of view, and
we'll discuss our common interests
which are the predominant aspect of our
view in Central America, and I hope
that we will be able to make some prog-
ress. I feel certain that we will.

There is one other subject that I
think is sure to be on the agenda and
that's the problem of international debt.
I think we have done, in the world at
large and in our own country, a truly
remarkable job of handling in the last
year and a half an extremely difficult
problem, with these large debts that
have had to be serviced over the last
year and a half or so in an environment
of little growth in the world economy.

Mexico has managed to turn things
around, and President De la Madrid
really deserves a tip of the hat for the
tough measures that he has put into ef-
fect and the way in which he has been
operating their economic policy. Mexico
seems to have gotten itself in a position
now where its debt problems are under
control. The rise in interest rates that
we've been seeing recently has very
serious implications for the debt levels.
If you have a debt of $50 billion and you
lay another percentage point on the in-
terest rate, that's a lot of dough.

These problems will be discussed,
not only with respect to the United
States and Mexico but also on a more in-
ternational scale. We have been address-
ing them, of course, and we are being
successful in doing so, but the way to
continued success is continual address-
ing of these problems and continual
work on them. President De la Madrid
recently made a trip through many
countries in South America and dis-
cussed these issues, so he will have the
insights developed from that trip, and
I'm sure will share them with us.

Q. Your predecessor, Secretary
Haig, has written rather bitterly, I
think, about his relationship with the
White House staff in policy formation.

ARMS CONTROL

When you get up in the morning with
a new idea, how does that get con-
verted into policy? Who do you call?
And are you deeply satisfied with the
process?

A. Insofar as my relationships with
my colleagues are concerned, they are
fine. I work easily with the White House
staff and, of course, with the President.
The President's the boss; I work for
him: I don't have a foreign policy; he has
a foreign policy. So one of the things
that I do — and I did when I was in the
government before — is to try to come to
understand the President's thinking and
his approach. And, of course, I wouldn't
be here if I didn't find myself in full
sympathy and on the same wavelength
as the President. But I see the President
frequently, innumerable meetings prac-
tically every day over in the White
House in one way or another, as the
course of business goes on.

In addition to that, the President
and I sit down together, just the two of
us, regularly; and I have a little agenda
I always take to the meetings, and he
has one. It's sort of no announced agen-
da; we just talk and try to informally ex-
plore one issue or another. So I don't
have any communications problems with
the White House at all— quite to the
contrary — and I find the working rela-
tionships, on the whole, fine. That
doesn't mean I don't have arguments
with people, and I do. I don't believe in
having our arguments in public par-
ticularly, but I can assure you, in our
councils I express myself and say my
views, and I get my way a reasonable
share of the time.

But at any rate, if you could point
to an Administration where nobody ever
disagreed with each other, nobody ever
argued, nobody ever said, "Well, just a
minute, Mr. President, have you thought
of this?" that would be pretty tough.
You wouldn't want that. We have good,
healthy discussions in this Administra-
tion, and the President encourages it.
And as far as I'm concerned, I find that
he is a great leader and a wonderful
human being to work with. Both my
wife and I enjoy the President and
Nancy and feel that not only are they
the President and First Lady but also
good friends and good company.

Q. Speaking of arguments, we
seem to have a little argument with
King Hussein of Jordan. Several
weeks ago, in an interview with
Judith Miller of The New York Times,
Hussein expressed considerable
disillusionment with President
Reagan's policy in the Middle East.

One of the reasons he cited was the
refusal of the United States to go into
the United Nations and reassert its
support for UN Resolution 242 and
also to reaffirm its previous position
that the settlements on the West Bank
of the Jordan are illegal. I'd like to
ask you whether the United States
does continue to support UN Resolu-
tion 242 calling for the withdrawal of
Israel from the occupied territories,
and whether the United States con-
tinues to hold its previous position
that those settlements on the West
Bank are, in fact, illegal?

A. I think King Hussein has been
particularly upset about the difficulties
of getting through the Congress our
ability to supply him with the military
equipment that he feels he needs — and
which we feel he needs — to defend
himself, not against Israel but against
others in his neighborhood, particularly
Syria. So I think that frustration is an
underlying problem that King Hussein
has, and we share that frustration. But I
think that if King Hussein were to find
himself in the peace process and
negotiating with Israel, he would find
the attitudes in this country sharply
shifted, and that is what we work for.

As far as Resolution 242 is con-
cerned, we support that. The President's
September 1, 1982, initiative was direct-
ly based on Resolutions 242 and 338 and
the Camp David accords. These are all
fundamentally consistent ideas and in-
volve the concept of an exchange of ter-
ritory for peace. That's the formula. But
obviously, it's much more complicated
than that.

And as far as the settlments are
concerned, the President said then, and
continues to say — and we have said it on
any number of occasions— that we think
the continued settlements are not a con-
structive thing. They are an impediment
in the peace process. We have made that
statement, and made it and made it.

Q. Do you consider it illegal, sir?

A. As far as the question of legality
is concerned, the President has said, and
our position is, that they are not illegal.
But its isn't a legal question; it's a ques-
tion of what these mean to the peace
process. We think that they are bad for
the peace process, and we would like to
see them curtailed. We have said that on
a great many occasions.

'Press release 130 of May 14, 1984.

Arresting the Nuclear Genie

by Kenneth L. Adelman

Address before the Mid-America
Committee in Chicago on May 2, 198i.
Ambassador Adelman is Director of the
Arms Control and Disarmament Agency
(ACDA).

It is a pleasure to be with the Mid-
America Committee to discuss one of
the most critical arms control issues
before us: stopping the spread of nuclear
weapons or, if you will, arresting the
nuclear genie.

I would ask you to pause for just a
moment and ponder the following:

• What if Iran or Iraq had the
nuclear bomb?

• What if a leader like Qadhafi or
an Idi Amin acquired that capability?

• What if the Palestine Liberation
Organization (PLO) or another terrorist
group acquired nuclear weapons?

Frightening thoughts, I am sure we
all agree. But live issues still. Constant
vigilance and active policies will be

necessary to avoid having these
nightmarish thoughts become realities.

Even today, talk about the spread of
nuclear weapons to Iran is in the news.
A British defense journal recently
alleged that Ayatollah Khomeini's Iran is
only 2 years away from acquiring
nuclear weapons. Our own assessment is
that it would take many more years for
either Iran or Iraq to develop nuclear
weapons, even if they decided to do so.

But even the possibility— however
slim— clearly is frightening. For nearly
4 years now, these two countries have
been engaged in a bloody war of attri-
tion. Neither has honored even the
limited conventions for conflict that have
grown up over the years. Iran has used
children as suicide troops; Iraq has used
deadly chemical weapons. There have
been nearly a million casualties on both
sides.

If either of these two warring na-
tions had nuclear weapons, does anyone
doubt that they probably would have
been used? Does anyone doubt that such
use would have greatly increased the

Department of State Bulletin

ARMS CONTROL

already terrible destruction and loss of
life? Does anyone doubt that the use of
nuclear weapons, or even only its pros-
pect, would have risked drawing in still
other nations, raising the danger of
wider conflict? Our interests in the Per-
sian Gulf, as well as those of our Euro-
pean allies and Japan, would be gravely
jeopardized.

Look elsewhere at the dangers of
nuclear terrorism. Imagine the
devastating impact upon the Western
economies if one of the key Middle East
oil production or distribution facilities
were struck by a terrorist attack using a
nuclear weapon. Or a terrorist group
might seek to smuggle a nuclear weapon
into a West European capital or into the
United States. The group's objective
might be to demand political conces-
sions, to extort financial compensation,
even simply to inflict terror and devasta-
tion.

The chances of opportunities for a
terrorist group to acquire a nuclear
weapon increase if the number of
nuclear powers increase. Imagine, if you
will, a Qadhafi with the bomb. And, I
might add, he has stated his ambition to
try to get one.

There are more examples, but the
point is clear: efforts to prevent the
spread of nuclear weapons are absolute-
ly critical to our attempts to create a
more stable and peaceful world, to
strengthen the already frayed fabric of
world order.

The spread of nuclear weapons
around the globe would threaten not
only their new owners' neighbors but
also ricochet to hurt the new owners
themselves. It would threaten the securi-
ty and well-being of the United States
and our close friends and allies. Indeed,
the possible spread of nuclear weapons
to any of the many regions of the world
characterized by continuing crises and
periodic military conflict poses the
greatest danger of nuclear weapons ac-
tually being used.

Controlling the Threat
of Nuclear Proliferation

How can we meet this challenge, or con-
trol this threat? We in ACDA wrestle
with that question daily since we have
major responsibilities in this critical
arms control area.

As a start, we need a defense in
depth: that is, a broad range of
measures and institutions that will
reduce the chances that these terrifying
weapons will spread still further around
the globe. Or — if you will pardon the
metaphor with the baseball season get-

July 1984

ting underway— this is a field in which
we can hit singles and perhaps a few
doubles but very rarely a home run.

Security and Foreign Policies. A

first part of that defense is a range of
security relationships, guarantees, and
other policies. These are often over-
looked in discussions of proliferation
problems because they have little direct-
ly to do with nuclear weapons spread.
By contributing to regional political
stability, however, they reduce any in-
centives countries might otherwise have
to "go nuclear." Thus, these tools of our
broad security and foreign policies are
also indispensable to our efforts to pre-
vent the spread of nuclear weapons.

Measures To Control Acquisition
of Nuclear Explosives. A second essen-
tial element in this defense are measures
to slow and impede the technical prog-
ress of any country that sets out on the
road to acquire nuclear explosives. The
United States, has, with some other
countries' support, pursued such
measures to rather good effect.

Over the past several years, we have
led an international effort to upgrade
and strengthen controls for nuclear
exports applied by the major nuclear
suppliers. Just last January, all these
suppliers agreed on steps to tighten con-
trols on technology, such as specialized
electrical equipment, pumps, and motors
used for enriching uranium. "Enriching"
sounds innocent, but that process is one
of the two paths by which a country
could acquire "bomb-grade" material.

We cannot rest as technology
marches on. Today, work is underway to
deal with the threat posed by other sen-
sitive technologies, particularly those
needed to acquire plutonium, another
material used to make nuclear weapons.

The U.S. Government is, I can
assure you, on the lookout for efforts by
countries to pursue a nuclear explosives
capability. We have a system for
"nuclear export alerts" that plays an im-
portant part in trying to impede such
pursuit. With early warning of pending
purchases of items or technology that
can help a country on a road to nuclear
explosives, the United States can take
action itself, or urge other governments,
to prevent the shipment. In 1983, we
had more than 100 of these "nuclear ex-
port alerts."

Nonetheless, nearly four decades
have passed since the first nuclear ex-
plosion at Alamogordo, New Mexico, in
July 1945. That is another way of saying
that nuclear weapons are, in some
respects, an old technology — as old, say,
as television. The leaders of every coun-

try that might be contemplating acquir-
ing nuclear weapons know the most im-
portant technical fact about them: they
work.

Thus, important as our efforts are to
reinforce the technical barricades
against nuclear weapons spread, they
can in the final result only buy time. In
some cases, of course, we can buy a
great deal of time. In others, the time
may be short. But, whatever time we
buy can be valuable in itself. A later
political change may bring to power
leaders not committed to developing
nuclear explosives.

One of our most important problems
is how to use wisely the time that has
been bought. How do we take advantage
of whatever breathing space we gain?
The defense in depth can fall apart if
that time is not put to good and
sometimes hard use.

One way to use that time produc-
tively is to work on reducing the motiva-
tions, either real or imagined, that can
move countries toward nuclear weapons
in the first place. This leads me back to
the strong and credible alliances and
security ties around the world that I
mentioned earlier. They are vital for our
nonproliferation goals.

This is one reason why the Reagan
Administration has sought to buttress
our longstanding alliance with South
Korea, making clear we have no inten-
tion to withdraw U.S. troops needed to
preserve stability on the Korean Penin-
sula. We have also worked to establish a
new security relationship with Pakistan,
which holds out the best chance of
reducing any incentives that country
may have to acquire nuclear explosives.

Strengthening International In-
stitutions. Third, fielding a defense in
depth also requires that whatever time
is available be used to strengthen the in-
ternational institutions that help prevent
the spread of nuclear weapons. While
we justifiably question the net value of
some international agencies, the Interna-
tional Atomic Energy Agency, or the
IAEA as the jargon would have it, is
one that is very much in our interest.

Created in 1957, largely as a result
of President Eisenhower's initiative, the
IAEA has the vital responsibility to
verify that nuclear materials in over 700
installations throughout the world are
used only for peaceful purposes. Over 90
countries have signed agreements with
the IAEA under which they have
obligated themselves to provide that
agency with detailed information on
their nuclear activities and to allow the
IAEA to carry out frequent onsite in-
spections to verify the accuracy of that

ARMS CONTROL

information. More than 1,700 inspec-
tions are carried out each year in about
50 countries with active nuclear pro-
grams. Each year, more than 6,000
security seals are applied or checked,
hundreds of measuring and surveillance
devices are used, and nearly a million
pieces of data are analyzed.

Countries accepting safeguards on
all their nuclear activities demonstrate
their peaceful intentions and reduce
suspicions on the part of their
neighbors. Nuclear activities outside of
safeguards in non-nuclear weapons
states are, of course, of proliferation
concern. For this reason, the United
States actively seeks to convince these
states to accept comprehensive
safeguards on all their nuclear activities.
And, last year, President Reagan under-
took a major initiative to have the
nuclear suppliers require that acceptance
as a condition for significant new export
commitments.

An effective safeguards system can
detect possible misuse of peaceful
nuclear technology, thereby ringing the
alarm bell. That risk of detection can
discourage a country from misusing
equipment and materials designed for
peaceful nuclear uses.

That leaves a question, of course, of
how countries around the world will re-
spond if the alarm bell rings? President
Reagan has made clear that any viola-
tion of IAEA safeguards or of the Non-
Proliferation Treaty or a nuclear explo-
sion by a non-nuclear power would be of
grave concern for the United States.
Specific sanctions also are provided by
U.S. legislation and international
agreements in the nuclear field.

But, to be honest, we need to
strengthen the prospect of strong sanc-
tions. Those warnings are necessary for
an effective preventive system. We need
to remind potential proliferators that the
response of the United States and
others will come down hard if the alarm
sounds. A strong manifestation of U.S.
resolve can help tip the balance against
a country seeking nuclear weapons.

The International Nonproliferation
Norm. Fourth, preventing the spread of
nuclear weapons also demands that we
use the time available to enhance sup-
port for the international norm against
acquiring these weapons. Past ex-
perience here is quite illuminating.

In I960, France detonated its first
nuclear weapon in the Algerian desert.
French President de Gaulle immediately
sent a congratulatory telegram to his
scientists at the site, lauding their great
feat and stressing that France, too, now

had the access due it as a great power
to the most advanced weaponry. Little
more than a decade later, in 1974 India
detonated a nuclear explosive in the
Rajasthan desert. Rather than stress-
ing India's acquisition of advanced
weaponry, Indian Prime Minister Gandhi
called that blast a "peaceful nuclear ex-
plosion" needed to build harbors and dig
canals. That is a distinction that we all
know has no practical difference. India
sought, so to speak, to sneak into the
"nuclear weapons club" through a back
door.

What these two stories reflect, to
my mind, are the changed international
mood and expected standard of
behavior. Put simply, it is no longer
thought legitimate to acquire nuclear
weapons.

This changed international norm is
best evidenced by the readiness of more
than 120 countries to adhere to the
Nuclear Non-Proliferation Treaty. Under
this treaty, non-nuclear nations renounce
any future acquisition of nuclear
weapons and accept international
safeguards on all their civil nuclear ac-
tivities. Countries with nuclear weapons
agree not to assist other countries to ac-
quire these weapons and to negotiate in
good faith on agreements to limit and
reduce their own nuclear forces.

We continually seek to strengthen
this barrier by encouraging the rela-
tively few holdouts to join the treaty. In
this Administration 10 new states
agreed to adhere. Regrettably, several
key countries — such as South Africa,
Pakistan, India, and Israel — continue to
reject the treaty for a variety of
reasons.

Next year a large international con-
ference will be held to review the im-
plementation of the Non-Proliferation
Treaty. We will work long and hard to
ensure its success, to demonstrate that
the treaty continues to have the support
of its many adherents. The world at
large can ill afford to allow this crucial
arms control treaty to be eroded.

Another example of the non-
proliferation norm and a key part of our
defense in depth is the Treaty of
Tlatelolco. This treaty was promoted
and negotiated by our neighbors in Latin
America and seeks to create a continent
free of nuclear weapons. Most Latin
American countries have joined but
regrettably not all. All five nuclear-
weapons states have agreed to a special
protocol to the treaty that prohibits
them from deploying nuclear weapons in
Latin American countries for which the
treaty is in force.

Early in this Administration, Presi-
dent Reagan sought and obtained Senate
ratification of a second important non-
proliferation protocol to this treaty,
thereby removing one obstacle to its
complete success. That success will de-
pend principally on the recognition by
the few countries in the region that have
not yet joined that it is in their interest
to do so. For example, a decision by the
new civilian Alfonsin government in
Argentina to accede to the treaty could
contribute greatly to stability in the
region. We are actively encouraging
Argentina as well as other countries to
take all the steps necessary to bring the
treaty into force.

Those countries outside these
systems and not accepting these norms
are, to be sure, major concerns. We
need to use the time we buy to bring
them closer if not completely into accord
with the international nonproliferation
norms and responsible behavior of most
nations.

In this regard, the President just an-
nounced in Beijing our new agreement
for peaceful nuclear cooperation with
China. A lot of the "news" has focused
on the prospects of nuclear commerce
with China. An extremely important
result of this recent opening to China
has been frequently overlooked.

Within the past months, China has
moved to accept many international non-
proliferation practices and norms. It has
joined the International Atomic Energy
Agency. It has stated that it will require
recipients of Chinese nuclear equipment
or materials to accept international
safeguards on such items as a condition
of sale. It has made clear that it will not
assist or encourage other countries to
acquire nuclear explosives.

These three actions are most
welcome steps. U.S. discussions on
nuclear cooperation with China over the
past year — as well as those of other
countries — contributed to this beneficial
result. That effect may be difficult to
calculate, but it clearly serves our non-
proliferation goals.

Worldwide Cooperation. Fifth, our
defense in depth against nuclear pro-
liferation requires the cooperation of
other countries. In the nonproliferation
area, like so many others, we simply
cannot do it alone — or go it alone.

Cooperation with our European
allies, Japan, and other countries which
supply nuclear material and equip-
ment— from enriched uranium fuel to
large commercial power reactors — is
essential if we are to continue to press
the technical barriers against prolifera-
tion. The cooperation of many neutral

Department of State Bulletin

ARMS CONTROL

and nonaligned countries as well is
necessary if we are to ensure that the
international norm against proliferation
remains strong.

The United States and the Soviet
Union also have mutual interests when
it comes to nonproliferation. Indeed, in
the past few years our discussions in
this field have been intensive and exten-
sive and on a more regular basis. Our
two countries have continued to share
similar views in this area for a rather
simple reason: the Soviets do not want
to see other countries acquire nuclear
weapons any more than we do. They
know that it will threaten their security.

Cooperation at home is also neces-
sary. Of course, we in the executive
branch do not always agree with the
Congress on particular proposals to deal
with the threat of nuclear weapons
spread. This is an area in which rea-
sonable people can and do differ on tac-
tics but not on the goals. And, of course,
Members of Congress do not always
share our approach. Despite differences
of view, the two branches need to work
effectively together to achieve our coun-
try's abiding nonproliferation goals.

Future Prospects

What about the future? Should we be
optimistic or pessimistic about the pros-
pects for avoiding the further spread of
nuclear weapons around the world? It
strikes me in thinking about those ques-
tions that throughout the past decades,
the very gloomy forecasts of a world of
more and more nuclear weapons states
have not held true.

This is one area of arms con-
trol— unfortunately there are too few
such areas — where we have succeeded
far better than was expected. If, in the
words of yet another one of Parkinson's
laws, the success of a policy is measured
by the catastrophes which do not hap-
pen, we have to a large degree met that
test — and met it well. This arms control
success story should not and cannot be
ignored.

Let's look back a bit. In 1958 a
special committee of the National Plan-
ning Association predicted in a mono-
graph 1970 Without Arms Control that
"by 1970, most nations with appreciable
military strength will have in their
arsenals nuclear weapons — strategic,
tactical or both." Similarly, President
Kennedy warned of a world in which by
1975 there would be 15-20 nations with
nuclear weapons.

Five countries are, as you know,
nuclear weapons states. Also, India has

July 1984

detonated a nuclear explosive. Still the
pessimistic predictions have not come to
pass.

Instead, the United States and many
other countries have put those past
decades to good use. Through those ef-
forts we have many building blocks
against the spread of nuclear weapons.

Now most countries around the
world have come to recognize that
preventing the spread of nuclear
weapons is very much in their interest
and that if they are not part of the solu-
tion, then they are part of the problem.

But we cannot — dare not — rest on
past efforts and established building
blocks. Preventing the spread of nuclear

weapons as prophesied by President
Kennedy "into the hands of countries
large and small, stable and unstable,
responsible and irresponsible, scattered
throughout the world" is a continuing
challenge.

With patient effort, and high-level
attention and public support, I believe
that we can meet that challenge suc-
cessfully. I know that President Reagan
feels very strongly about this. I have
been in a number of meetings with him
and have not only felt but heard him
speak of the sense of urgency which
nonproliferation demands. The nuclear
genie is out of the bottle but we
can — and must — arrest its travels. ■

Western Proposals at MBFR Talks

WESTERN STATEMENT,
MAY 24, 1984

On April 19 the Western participants [at
the mutual and balanced force reduc-
tions (MBFR) talks] put forward an im-
portant new proposal. This initiative
alters the longstanding Western require-
ment for formal agreement on the
precise numbers of all military personnel
in central Europe before any reductions
can be taken. It demonstrates Western
flexibility by designing an approach for a
successful data exchange avoiding a
reversion to the unproductive disputes
of the past.

In a spirit of compromise, under the
new Western approach, we would re-
quire an exchange of data prior to trea-
ty signature and before any reductions
take place only on a portion of just the
ground forces in the area — namely, com-
bat and combat support forces. In set-
ting aside service support forces, we are
deliberately excluding a portion of the
forces where we believe much of the
discrepancy has lain.

By proposing a new mode for
discussing data, the initiative allows for
resolution of ambiguities regarding what
is counted and how it is counted which
have contributed significantly to earlier
disagreement. Moreover, the new
Western approach does not require a
formal agreement on precise figures but
only that figures fall within an accept-
able range of the sides' estimates.

Finally, this new methodology for
exchanging data enables the sides to
table official force figures in a wholly
revised format with no direct connection
with figures tabled earlier in the
negotiations.

In all these ways, the new Western
approach would facilitate a successful
data exchange.

In addition, the new Western pro-
posal also meets a number of Eastern
concerns on a range of other important
issues. For example, the Western pro-
posal:

• Accepts the Eastern idea of a no-
increase commitment on manpower in
the reduction area following initial
U.S. -Soviet reductions;

• Reduces the period required to
reach parity from 7 to 5 years, matching
effectively the duration of the reduction
process proposed by the East; and

• Accepts the Eastern requirement
that U.S. and Soviet reductions should
be taken in the same form, to allow for
reductions by both the United States
and U.S.S.R. essentially in units, with
no more than 10% to be taken as in-
dividuals.

The new Western proposal thus con-
stitutes a determined effort to resolve
the most basic standing in the way of
progress in these negotiations and pro-
vides a series of additional compromises
to promote these negotiations.

Any objective analysis will show
that, as in the past, nothing in the
Western position is designed to afford
unilateral advantage to any participant
or side.

Our proposal is not put forward on a
take-it-or-leave-it basis but in a construc-
tive spirit of compromise. We are
prepared to discuss any aspects of it. It
would be an unfortunate error on the
part of the East if the spirit and
substances of the Western move were

ARMS CONTROL

not recognized. It is now for the East to
adopt a constructive attitude and help
develop a common approach toward
reaching an agreement.

PRESIDENT'S STATEMENT,
MAY 24, 19841

Today in Vienna, negotiators from East
and West resume the talks on mutual
and balanced force reductions, or
MBFR. The purpose of these talks, in
which 18 NATO and Warsaw Pact na-
tions are participating, is to reach an
agreement to reduce conventional forces
in central Europe.

On April 19, near the end of the last
round, the West presented a major new
initiative aimed at moving these negotia-
tions forward. The new Western pro-
posal seeks to overcome the longstand-
ing disagreement over the number of
Warsaw Pact soldiers in central Europe.
Our proposal will permit the two sides
to focus initial attention on counting just
their most highly structured and visible
forces, since this is the area where East
and West are already closest to agree-
ment.

The timing of this offer gave the
Warsaw Pact the opportunity to study it
in their capitals during the break be-
tween rounds. We, therefore, hope that
the Soviet Union and its allies are
prepared now to respond constructively
to our initiative and to move the
negotiations forward. By reaching
agreement on lower, equal, and
verifiable levels of conventional forces in
central Europe, we will be able to
enhance the security of both sides and to
strengthen peace and stability in
Europe. The force reductions themselves
and the associated verification measures
called for in the Western proposal would
enhance mutual confidence between
East and West.

The MBFR negotiations resume at
the same time that another part of the
East- West security dialogue, the con-
ference on Confidence- and Security-
Building Measures and Disarmament in
Europe (known as CDE), is continuing
in Stockholm. There, too, the West
presented a package of proposals that
would enhance confidence and trust
among the 35 participating countries.
And in both Stockholm and Vienna, the
West is fully prepared to discuss any
serious counterproposals from other par-
ticipants.

The West is doing its part to achieve
progress in other areas of arms control
as well. In the same week that we made
the new MBFR proposal, Vice President

Bush presented to the 40-nation Con-
ference on Disarmament in Geneva a
comprehensive U.S. proposal for a
global ban on chemical weapons. This
proposal will again be under discussion
when the Conference on Disarmanent
reconvenes in June.

We are just as prepared to move
forward in negotiating reductions in
nuclear forces. But the Soviet Union still
refuses to return to the START
[strategic arms reduction talks] and INF
[intermediate-range nuclear forces]

ASAT Arms Control

by Kenneth L. Adelman

Statement before the Subcommittee
on International Security and Scientific
Affairs of the House Foreign Affairs
Committee on April 10, 1984- Am-
bassador Adelman is Director of the
Arms Control and Disarmament
Agency.1

It is a pleasure to appear before the
committee today. I would like to concen-
trate on the arms control aspects of
U.S. policy on antisatellite weapons— or
ASAT for short— and ASAT arms con-
trol. I will expand on last week's report
to the Congress. My plan is first to
review the major arms control elements
of the report and then to address
several questions that have been raised
with regard to our policy.

There is a significant body of inter-
national law and agreements that
govern activities in space and that ban
or limit space weapons already. These
include:

• The UN Charter's ban on use of
force except in self-defense, which ap-
plies to space;

• The Outer Space Treaty ban on
placing in space nuclear weapons and
other weapons of mass destruction;

• The Limited Test Ban Treaty ban-
ning nuclear weapons tests in outer
space; and

• The ABM Treaty ban on develop-
ment, testing, or deployment of space-
based ABM systems or components.

With regard to specific treatment of
ASAT arms control, two international
efforts are particularly noteworthy.

The 1978-79 bilateral negotiations
between the United States and the
Soviet Union, begun at U.S. initiative,
found the sides were separated on

negotiations which it left last fall. I
repeat what I have said on many occa-
sions: We are prepared to resume those
negotiations at any time and without
preconditions. We again invite the
Soviet Union to return to the
negotiating table to resume the serious
work of reducing nuclear arsenals and
the risks of nuclear war.

■Text from Weekly Compilation of
Presidential Documents of May 28, 1984.

several issues, including verification
problems. Negotiations were not resum-
ed following the Soviet invasion of
Afghanistan.

Under the Reagan Administration,
the United States has supported and
continues to support discussions in the
Conference on Disarmament to sort out
space arms control issues.

The President, in his July 4, 1982,
space policy, said that the Administra-
tion would continue to study space arms
control options and would consider
verifiable and equitable space arms con-
trol measures that would ban or other-
wise limit testing and deployment of
specific weapons, should those measures
be compatible with U.S. national securi-
ty. The President reaffirmed this policy
in his letter transmitting the report to
Congress.

ACDA plays a major role in this sub-
ject. For example, we cochair the in-
teragency group on ASAT arms control.
This group was responsible for drafting
the report to Congress. Our goal is to
find initiatives that meet the President's
criteria. But, as the report frankly
states, devising space arms control ini-
tiatives is a difficult task.

Report to Congress

Some of the key considerations in this
area as set forth in the report are
highlighted below.

An ASAT arms control agreement,
if equitable, effectively verifiable, and
complied with, would have a number of
potential benefits. Depending on the
scope and effectiveness of an agree-
ment, it might limit specialized threats
to satellites and constrain future threats
to such key satellites as those for early
warning; it might raise the political
threshold for attacks against satellites;

Department of State Bulletin

ARMS CONTROL

and it might allay some international
concerns regarding the use of space for
military purposes.

These potential benefits will be dif-
ficult to achieve because of five key
problems.

Verification. In general verification
of arms control agreements is more im-
portant for the United States than it is
for the Soviet Union because, while the
United States is a very open society, the
Soviet Union is a comparatively closed
society. Verification of an ASAT ban is
made more essential by the fact that the
satellites which serve U.S. and allied
security are few in number. Cheating,
even on a small scale, could pose a
disproportionate risk to the United
States.

Breakout. Breakout is the risk that
a nation could gain a unilateral advan-
tage if an agreement ceased to remain
in force by obtaining a significant head
start in deployment of a type of weapon
that had been banned. Breakout poten-
tial could exist for the Soviets, even if
they were to destroy all of their existing
systems, because they could retain the
capability to redeploy quickly based on
the experience acquired with the present
system.

Definition. Defining what con-
stitutes a space weapon for arms control
purposes is difficult. Such weapons could
include coorbital interceptors, direct as-
cent interceptors such as exo-atmos-
pheric antiballistic missiles, ballistic
missiles with modified guidance logic,
directed energy weapons such as lasers
and particle beams, and other important
classes of weapons. Problems of weapon
definition are compounded because some
non-weapon space systems, including
civil and commercial systems, could have
characteristics which would make them
difficult to distinguish from weapons
systems. The fact that many systems
not designed to be ASAT weapons
nonetheless have inherent ASAT
capabilities, and the verification dif-
ficulties above imply that a truly com-
prehensive ban on tests of all means of
countering satellites is simply not possi-
ble.

Vulnerability of Satellite Support
Systems. An effective ban on ASAT
arms, if achievable, could not provide
survivability for all components of space
systems. Attacks on other elements of a
space system — ground stations, launch
facilities, or communications links — in
some cases may be easier and more ef-
fective than attacks on satellites
themselves.

July 1984

Soviet Non-Weapon Military Space
Threat. Any examination of space arms
control needs to include a discussion of
the growing threat posed by present and
projected Soviet space systems which,
while not weapons themselves, are
designed to support directly the
U.S.S.R.'s terrestrial forces in the event
of a conflict. These include recon-
naissance satellites designed to use
radar and electronic intelligence to pro-
vide targeting data to Soviet weapons
platforms for use in seeking to attack
U.S. and allied surface fleets and land
conventional forces.

Since 1977, we have been developing
an antisatellite system — the miniature
vehicle (MV) system — for basically two
purposes: first, to deter threats to our
own space systems by having the ability
to respond in kind; second, to help deter
conventional and nuclear terrestrial con-
flict by placing at risk, within the limits
of international law, certain satellites
which provide support for hostile
military forces.

This is a prudent response to the ex-
isting Soviet antisatellite weapon and to
Soviet deployment in recent years of a
number of military satellites which, even
though not weapons themselves, are
designed to support directly the
U.S.S.R.'s terrestrial forces in the event
of a conflict. In the absence of a com-
parable U.S. system, or of verifiable
agreed limits on ASAT systems, the
Soviets have a significant military ad-
vantage with their ASAT system.

This measured response to the
Soviet space threat may be construed by
some as constituting an arms race in
space weapons. In my view, it does not.
Nor does it preclude future ASAT
negotiations should we find equitable
verifiable arrangements that are consist-
ent with our national security.

With regard to multilateral space
arms control activities, the United
States has supported discussion of a
broad range of questions on space arms
control at the Conference on Disarma-
ment (CD). Together with our allies, we
supported in 1983 the establishment of a
CD working group on outer space to ex-
amine in detail the existing legal regime
and questions concerning space arms
control. This approach was also accept-
able to the neutral and nonaligned group
at the CD but was blocked by the
Soviets and their surrogates. Recently
we have given our CD delegation addi-
tional authority. I cannot report to you
at this time whether the Soviets will also
block this approach. But I can state that
the United States supports serious and

responsible examination in the CD of
space arms control issues.

However, no way has yet been found
to design a satisfactory comprehensive
ASAT ban. Less sweeping options under
study would limit specific types of
weapons, of actions, or of threats. Since
we must protect our satellites against
threats that could be developed without
our knowledge, there is a premium on
finding ways to limit the systems most
difficult to defend against. We are
searching for such limits which are ef-
fectively verifiable and which allow us to
protect U.S. and allied forces from
threatening Soviet satellites. Other op-
tions would regulate certain threatening
activities related to space. The door is
not closed to ASAT arms control. The
Administration is continuing the active
search for viable arms control oppor-
tunities in the ASAT area.

I believe that our policy is respon-
sive to the desire we all share to limit
arms in those areas where such limits
can enhance U.S. security. Given the
problems I enumerated, however, it is
clear that the United States is not yet in
a position to move forward toward
negotiations in this area at this time.
Thus, while I share many of its objec-
tives, I do not believe that passage of
House Joint Resolution 120 by Con-
gressman Moakley and several others
would bring us any closer to achieve-
ment of those objectives.

Key Questions

I would now like to address some of the
key questions that have most frequently
been raised about our policy.

One question deals with the relation-
ship between ASAT arms control, U.S.
development of ASAT capabilities, and
the President's Strategic Defense Ini-
tiative. Is that Initiative the "real
reason" — as opposed to the list of prob-
lems I gave you — why the Administra-
tion refuses to enter into ASAT negotia-
tions?

The answer is no. The Strategic
Defense Initiative has the ultimate goal
of reducing the threat posed by nuclear-
armed ballistic missiles. However, at
present it is purely a research program,
fully consistent with all our treaty
obligations (including the ABM Treaty
which bans development, testing, and
deployment of space-based ABM
systems and their components). It is
structured to allow informed decisions in
the early 1990s on whether to proceed
to full-scale development and deploy-
ment.

ARMS CONTROL

At that time, or close to it, we will
better understand the role arms control
could play if we move toward a defense-
oriented regime and in a transition to
such a regime. At this time, with the
research program just beginning, it
would not be prudent to base our space
arms control posture on assumptions as
to whether a transition to such a regime
will or will not take place.

A second line of questions concerns
our studies. What options are being
studied? What is meant by the idea of
"regulating" certain threatening ac-
tivities in space? When will the conclu-
sions of the studies be announced?

As indicated in the report, we have
concluded that a comprehensive ASAT
test ban that would eliminate all means
of countering satellites could not be ef-
fectively verified. In fact, the more com-
prehensive the attempted limitation, the
greater the verification problems. For
that reason our current studies are con-
centrating on less sweeping options that
would limit specific types of weapons
systems or activities. Limits need to be
effectively verifiable if they are to help
build stability and protection.

We are also examining options that
would regulate certain threatening ac-
tivities related to space. Such regula-
tions could parallel and complement
other kinds of stabilizing measures such
as the "confidence-building measures"
that the United States has introduced in
the strategic arms reductions talks
(START) and intermediate-range nuclear
forces (INF) negotiations. Detailed con-
sideration is being given to measures in
this class specifically related to anti-
satellite weapons and space activities.
Examples of such measures in START
and INF are preannouncement of
ballistic missile launches and prenotifica-
tion of major military exercises.

Our studies of space arms control
are ongoing. We certainly will keep the
Congress and the public informed as to
their progress and conclusions.

A third question has been raised
concerning the relationship between our
policy and Senator Tsongas' amendment
to the FY 1984 Defense Authorization
Act. That amendment requires the
President, before an MV test against a
space object, to certify that the United
States is endeavoring to negotiate in
good faith a verifiable comprehensive
ASAT ban. As noted in the report, we
are endeavoring to respond to the thrust
of the Tsongas amendment by concen-
trating, in the ongoing studies, on the
more limited arrangements I described
that would ban or otherwise limit
specific weapon systems, types of ac-
tivities, or threats.

A fourth question frequently asked
is whether we are losing a one-time-only
opportunity to limit such weapons now
before they really get going.

That assumption is a bit off. The
Soviet Union has possessed, for over a
decade, an operational ASAT intercep-
tor system which threatens U.S. low-
altitude satellites. The U.S. MV program
represents a reasonable counter to this
system and, as noted, a deterrent to at-
tack on U.S. satellites. Neither system
precludes future ASAT agreements that
would seek to limit more capable, more
dangerous threats to our satellites.

In addition, a number of limitations
on space weapons already exist, as
described earlier. We must be certain,
before we attempt further limits in this
area of rapidly changing technology,
that we can devise proposals that are
equitable, verifiable, and compatible with
U.S. security. Agreements that do not
satisfy these criteria would be in no
one's interests.

A fifth question relates to the Soviet
Union's draft space arms control treaty
introduced at the United Nations last
August, their proposal for a moratorium
on testing ASAT systems, and for
bilaterial negotiations to discuss verifica-
tion problems.

We have studied the Soviet pro-
posals carefully. This treaty would pro-
hibit the use or threatened use of force
by or against space objects. It would
specifically prohibit testing and deploy-
ment of space weapons and testing or
development of antisatellite systems and
would require destruction of existing
ASAT systems. It provides for verifica-
tion by national technical means (NTM),
but nothing beyond.

Inadequate verification is one of its
major weaknesses. It would be nearly
impossible to verify the elimination of
the Soviet ASAT systems through NTM
alone. Their ASAT interceptor is
relatively small, as is ours, and is fitted
to a Soviet space booster used for other
space launch missions. We do not know
how many ASAT interceptors have been
manufactured. It would be quite easy for
the Soviets to maintain a covert supply
of interceptors which could be readied
quickly for operational use. The Soviet
call for a ban on space-based weaponry
raised other verification problems as
well. Verifying the inherent capabilities
and functions of objects in space could,
as you can imagine, be quite difficult.

The draft treaty proposes that
"piloted' spacecraft not be used for
"military purposes." We strongly suspect
that this provision is intended to con-
strain the use of our space shuttle,

which in the years ahead will serve as
the primary U.S. launch system for both
civil space as well as national security
missions. At the same time, the treaty
would apparently not constrain the
Soviet unpiloted space station.

With regard to the Soviet Union's
proposed moratorium on testing ASAT
systems, accepting it would put the
United States at a serious disadvantage.
The Soviets would retain their opera-
tional ASAT, tested many times, while
the United States would be prohibited
from testing its ASAT interceptor. Fur-
thermore, a test moratorium would not
necessarily cause their operational
system to atrophy. After a hiatus of
several years in ASAT testing, the
Soviets were able to resume testing of
their system without any apparent
degradation in performance. Programs
that are still in research and develop-
ment stage, as is our proposed ASAT
system, pay a much higher price for a
test moratorium.

Finally, until we have determined
whether there are in fact practical solu-
tions to the definitional and verification
problems associated with outer space
arms control, we do not believe it would
be productive to engage in formal
bilateral negotiations with the U.S.S.R.
in this area. We would, of course,
welcome clarification from the Soviets
with respect to means of verifying their
proposed treaty.

A final question concerns a com-
parison between space and other arms
control areas. Why is the Administration
proposing to negotiate a chemical war-
fare ban treaty, which has severe
verification limitations, while it refuses
to negotiate an ASAT test ban?
Granted, the verification difficulties are
great in both. To try to solve these in
the chemical warfare realm, we will be
proposing bold cooperative measures
that will help verification. More impor-
tantly, however, because of the small
number of high-value U.S. military and
intelligence satellites, cheating on an
ASAT agreement, even on a small scale,
could pose a disproportionate risk. This
situation is not analogous to chemical
warfare where deterrence is a much
stronger and more effective concept, or
to INF, where cheating on a small scale
would probably not pose a risk of the
same nature or alter the strategic
balance.

In closing I would like to paraphrase
the conclusions of our report. ASAT
arms control faces several very hard

Department of State Bulletin

EAST ASIA

problems; we have been working on
them very intensively and will continue
to do so. We are looking extensively into
a range of possible initiatives. We do not
believe we can or should enter into any
negotiations until we find concrete pro-
posals that make sense. But I can assure

you that we certainly have not given up
hope of finding such proposals.

'The completed transcript of the hearings
will be published by the committee and will
be available from trie Superintendent of
Documents, U.S. Government Printing Of-
fice, Washington, D.C. 20402. ■

U.S.-China Relations

by Paul D. Wolfowitz

Statement before the House Foreign
Affairs Committee on June 5, 1984. Mr.
Wolfowitz is Assistant Secretary for
East Asian and Pacific Affairs.1

I am delighted to have this opportunity
to meet with you and to offer testimony
on U.S.-China relations following the
President's recent trip to the P.R.C.

After accompanying President
Reagan to China, I made brief stops in
Seoul, Tokyo, Manila, Kuala Lumpur,
Singapore, Jakarta, and Bangkok, stops
aimed, in part, at briefing friends and
allies in the region on the outcome of
the President's talks in China. Although
the perspective on China generally and
U.S.-China relations specifically varied
in each of the capitals I visited, I believe
that the common reaction was highly
favorable. That is, there was a great
deal of appreciation for what the Presi-
dent sought to do, for what he acheived,
and for the obvious extent to which he
kept in mind the concerns of our Asian
friends and allies.

Our fundamental approach to rela-
tions with China is one that has enjoyed
bipartisan support through four Ad-
ministrations. The particular goal of this
Administration has been to put
U.S.-China relations on a more stable
and increasingly comprehensive
basis — one that avoids the extreme of
hostility and suspicion without succumb-
ing to the opposite extreme of euphoria
and sentimentality. The series of produc-
tive high-level discussions which we have
conducted with the Chinese over the last
15 months bears witness to the success
of this policy. The President's trip
reciprocated Premier Zhao's to this
country in January — the first ever to
this country by a P.R.C. head of govern-
ment. The groundwork for that visit in
turn was laid by serious, wideranging
talks during the preceding year by
Secretaries Shultz, Weinberger, Regan,
and Baldrige, as well as many sub-
cabinet officials, with their Chinese
counterparts.

July 1984

The President went to China in this
context, not to initiate a new era or to
seek dramatic new breakthroughs but
rather to strengthen and solidify the
foundations of this extremely important
relationship.

And the President's trip was highly
successful. The Chinese took every ef-
fort to make it so. By this I do not mean
only that the Chinese offered the Presi-
dent a warm reception, though they cer-
tainly did. As a token of the importance
they attached to this visit, the Chinese
scheduled a heavy load of substantive
meetings. The President held 7 hours of
formal meetings with China's top four
active leaders. Secretary Shultz met
with his counterpart, Foreign Minister
Wu, for an additional 3 hours. Unusual
courtesy and respect were accorded the
President in the other arrangements:
President Li Xiannian hosted an un-
precedented private dinner; Deng
Xiaoping made the unusual gesture of
hosting a working lunch; the Chinese
who attended the formal state occasions
included most of the senior foreign af-
fairs, science, economic, and military
leadership. The President delivered a
number of toasts and public statements,
presented two major addresses, and
gave a 20-minute television interview.
Although we regret that certain signifi-
cant portions of his remarks were not
carried in full by the Chinese media, the
President delivered important messages
to a wide audience.

At the conclusion of the visit, the
Chinese assessment was that the exten-
sive, indepth exchanges between the
President and senior Chinese leaders
had "significantly enhanced mutual
understanding and further strengthened
U.S.-China relations." We completely
share that assessment.

Economic and Commercial
Agreements

During the course of the President's
meetings in Beijing and in numerous
other official and private contacts, we

have significantly advanced our
economic and commercial relationship
with the P.R.C. This Administration
considers that a strong, stable,
economically modernizing China which is
expanding its ties with the major in-
dustrialized democracies can be an in-
creasing force for peace, both in Asia
and the world. This is the significance of
the President's decision this past winter
to liberalize our technology transfer
policy toward China.

Closer economic ties will benefit
both our peoples. We took important
steps to these ends during the
President's trip. In discussion of our cur-
rent trade deficit with the Chinese, the
Chinese offered a welcome affirmation
that planned industrial purchases from
the United States will soon turn that
around to a surplus for us. In addition,
as you know, during the President's trip
we signed a bilateral tax treaty which
will give assurances against dual taxa-
tion to our businessmen. We signed an
implementing accord to our cultural
agreement, which means that official
cultural exchanges will take place again
after a 1-year hiatus. We also signed
protocols involving cooperation in
management and in scientific and
technological information exchanges. At
the same time, we have sought and ob-
tained Chinese assurances that Beijing
will fulfill the terms of its long-term
grain agreement with the United States.

Nuclear Cooperation

Finally, we initialed one other important
agreement, an agreement on peaceful
nuclear cooperation. Since this agree-
ment will have to be reviewed by the
Congress, I would like to touch on it for
a moment even though detailed
testimony on the agreement by Am-
bassador Kennedy [Richard T. Kennedy,
special adviser to the Secretary on non-
proliferation policy and nuclear energy
affairs] must await final executive
branch review and Presidential approval
and authorization of the text.

I believe that the peaceful nuclear
cooperation agreement is an important
one. It will not only have a significant,
positive impact on overall U.S.-China
relations but it will also further the non-
proliferation and other foreign policy in-
terests of the United States. Our in-
terest in concluding this agreement with
China results in part from the potential-
ly significant commercial and trade
benefits; however, our most important
objective during the 3 years of negotia-
tions that produced the agreement has
been to further U.S. nonproliferation in-
terests.

EAST ASIA

During the period of our negotia-
tions, China took several important
steps which clarify its nonproliferation
and export policies.

• China joined the International
Atomic Energy Agency (IAEA) in
January.

• China made clear that thereafter
it would require IAEA safeguards on its
nuclear exports.

• Premier Zhao made important and
authoritative statements of China's non-
proliferation policy which make clear
that China will not contribute to pro-
liferation.

This agreement will provide both a
framework and a context for the con-
tinuation of discussions with China on
nonproliferation matters. Naturally, in
the case of a nuclear cooperation agree-
ment with the P.R.C. as with all coun-
tries, we will follow the procedures
established by U.S. law for review and
submission to Congress. After the Presi-
dent approves the agreement and it is
signed, the agreement text, along with
the required accompanying documents,
will be transmitted to the Congress.
Following its receipt by the Congress,
the Administration will be prepared to
discuss all aspects of the proposed
agreement in detail. We expect this to
be able to occur shortly.

Agreement on nuclear cooperation
and on measures to develop further our
economic and commercial ties are signs
of a relationship that is developing in a
healthy way. This Administration
believes such developments benefit not
only our economic interests but our
security concerns as well.

Regional Issues

The President also had a number of im-
portant discussions on critical interna-
tional issues. One could reasonably con-
clude that where Chinese interests are
directly engaged — particularly in
countering aggression by the Soviets in
Afghanistan and by their surrogates, the
Vietnamese, in Kampuchea — there tends
to be a strong identity of views between
us.

On the Korean Peninsula, where the
Chinese and we have different allies and
therefore somewhat different perspec-
tives on the key problems and their solu-
tions, we also acknowledge our common
interests in seeking to reduce tensions
and assure peace and stability. The
President and his Chinese hosts dis-
cussed Korea at some length, and we
believe these conversations were con-
structive. The President made clear to

the Chinese that our troops are in South
Korea to defend our ally and that the
sole threat to peace and stability on the
peninsula emanates from the North as
was evidenced in the Rangoon bombing
atrocity last year. The Chinese ex-
pressed their support for North Korea's
proposal for tripartite talks with the
United States and South Korea. The
President reiterated our strong
preference — and that of our South
Korean allies — for direct talks between
North and South Korea or, if both
Korean parties are willing, for
quadripartite talks to involve the United
States and China. The President in-
dicated that he hoped the Chinese might
be helpful on the margins of any talks
that get started, or perhaps participate
in talks. At present, however, the
Chinese have said that their participa-
tion in any formal talks would be dif-
ficult.

It is our view that there are many
concrete steps toward progress on
reducing tension on the Korean Penin-
sula that could be taken right away
without even waiting for formal talks to
begin. These include such steps to
reduce military tensions as:

• Mutual notification of military ex-
ercises;

• Exchange of observers for
military exercises;

• Genuine demilitarization of the
DMZ [demilitarized zone]; and

• Investigation of DMZ incidents by
teams from the Neutral Nations Super-
visory Commission.

A second category of concrete steps
that could be taken are in the area of
improving North-South contacts. The
Government of the Republic of Korea
has proposed some 20 steps of this kind
to build confidence and reduce tension
between North and South. Three that
seem to us particularly sensible are pro-
posals for direct telephone communica-
tion between Seoul and Pyongyang, for
exchange of mail, and for family visits,
all of which have recently been
reiterated.

Such positive, concrete steps would
go a long way in the present context to
reducing the obstacles to reductions of
tension and meaningful talks. We would
all welcome a positive response from
Pyongyang.

Finally, current Sino-Japanese rela-
tions are the best they have been in this
century. This development not only
enhances China's ability to modernize its
economy but also directly serves our in-
terest in peace and stability in the
region.

In his meetings with the Chinese
leaders, the President demonstrated that
when there is a genuine will on both
sides, countries with very different
political and social systems can never-
theless find ways to work together,
reduce tension, manage problems, and
identify areas for future cooperation.
The President was frank about our dif-
ferences and firm on points of principle.

This was so with regard to the ques-
tion of Taiwan's future, which was
raised by the Chinese on several occa-
sions. The President stated clearly to
the Chinese, as he and others in his Ad-
ministration have done before, that we
will honor our commitments, that we ex-
pect the Chinese to honor theirs, and
that within such a framework this issue
is one for the Chinese on both sides of
the strait to resolve by themselves. Our
sole and abiding concern, the President
reiterated, is that any resolution be a
peaceful one.

Conclusion

In conclusion, the President's visit to
China and the visit here in January by
Premier Zhao were part of a process.
The President's meetings with China's
top leaders strengthened and advanced
an extremely important relationship be-
tween friendly nations. In a broader
sense, the President's trip to China
should be viewed in the context of his
visits late last year to two of our Asian
allies, Japan and Korea, and as an in-
tegral part of his policy toward the en-
tire Pacific Basin. This area of the world
is developing rapidly and plays an in-
creasingly crucial role in our global
foreign policy. The President's China
trip was also part of his policy of
strengthening relations with friends and
allies around the world, a policy which
he will continue to advance when he
meets next month in London with
leaders of the industrialized
democracies.

•The complete transcript of the hearings
will be published by the committee and will
be available from the Superintendent of
Documents, U.S. Government Printing Of-
fice, Washington, D.C. 20402. ■

Department of State Bulletin

EAST ASIA

Visit of Thailand's
Prime Minister

Prime Minister Prem Tinsulanonda
of the Kingdom of Thailand made an of-
ficial working visit to Washington, D.C.,
April 12-1U, 1984, to meet with Presi-
dent Reagan and other government of-
ficials.

Following are remarks made by
President Reagan and Prime Minister
Prem after their meeting on April 13. i

President Reagan

I'm delighted to have this opportunity to
exchange views with Prime Minister
Prem and to discuss with him events in
Southeast Asia and in other parts of the
world.

This is the Prime Minister's second
visit with me, and on both occasions he's
provided valuable counsel. And I am
particularly happy to renew our personal
relationship, because it mirrors the deep
friendship between the Thai and
American people. Thailand and the
United States have a history of friend-
ship and cooperation going back to 1833,
when we signed the Treaty of Amity
and Commerce.

Today we took our relationship one
step further with the signing of a
science and technology agreement. The
150 years of our relations have seen
many changes, yet throughout this time
the fundamental determination of the
Thai and American people to live their
lives in freedom is unchanged.

Whatever our differences of climate
or culture, in our love of liberty we're
the same. This is the unchanging basis
of our friendship. The economic vitality
found in Thailand is something else with
which Americans identify. American in-
vestors and traders are proud of the
part that they're able to play in
Thailand's growth. Working together,
Americans and Thais are building a bet-
ter quality of life for both our peoples.

Prime Minister Prem will return to
his country confident in our friendship
and assured that America's com-
mitments remain sound and solid. As
treaty allies of the Manila pact, the
United States fully appreciates the situa-
tion in Southeast Asia and Thailand's
key role in ASEAN's [Association of
South East Asian Nations] effort to pro-
mote peace and stability in that vital
area.

In response to Thailand's immediate
security requirements, I'm happy to an-

July 1984

nounce that the United States will make
available immediately a sizable number
of M-48 tanks. We'll also request the
Congress to extend the repayment
terms of our security assistance to
Thailand. High-level defense counsulta-
tions between our countries will con-
tinue. We'll discuss Thailand's overall
defense needs, including its requirement
for advanced aircraft, something we
fully support. The Administration will
confer with the Congress on these
defense matters, as appropriate.

Thailand today will be celebrating,
by the old lunar calendar, the beginning
of the new year. So, may I wish you,
Mr. Prime Minister, and all the people
of Thailand, a very fine Songkran holi-
day and, for all the Thai people, pros-
perity, health, and peace. We're pleased
to have had you as our guest, again.

Prime Minister Prem

I was most pleased and honored to be
invited to meet with President Reagan
for the second time since my last visit 3
years ago. My discussions with the
President on issues of mutual concern
and interest were most constructive and
fruitful. Together we have decided on
ways and means to strengthen our
bilateral ties and to enhance our
cooperation.

The relationship between our two
countries spans over one century-and-a-
half. Over the years the relationship has
increased in strength and expanded in
dimension. Under the leadership of
President Reagan, the United States has
returned to the traditional values and
demonstrated a determination in the

pursuit of real peace. On our part,
Thailand and the other ASEAN partners
have distinguished themselves as a
moderating influence on the interna-
tional economic and political issues. Our
collective efforts have served to enhance
security in Southeast Asia, which is vital
to the stability and prosperity of the
East-Asian Pacific region and beyond.

Later on today, I will meet members
of the U.S. business community to ex-
plore opportunities for expanding trade
and business ties for mutual benefits.
Thailand shares with you the faith in the
dynamism of economic relationships be-
tween countries in the Pacific communi-
ty, the dynamism which has become
more evident and which represents
great economic potential for further
development.

The recovery of your economy,
which is undoubtedly the largest single
economy of the world, is most welcome.
For this to be longlasting, the recovery
must generate prosperity on the wider
front, particularly, in the free-market
economies such as that of Thailand.

Finally, on behalf of the Thai nation,
I would like to express our heartfelt
gratitude for the Administration's full
support to the modernization of
Thailand's defense. This gesture reaf-
firms the U.S. commitment to Thailand's
security in recognition of our role in
strengthening the fabric of peace in the
area, which the United States considers
to be vital to her interests.

'Made in the East Room of the White
House (text from Weekly Compilation of
Presidential Documents of April 16, 1984).

ECONOMICS

Looking Toward London:

10 Years of Economic Summitry

by W. Allen Wallis

Address before the American
Association of Exporters and Importers
in New York City on May 23, 1984. Mr.
Wallis is Under Secretary for Economic
Affairs.

When I accepted the invitation to be your
keynote speaker, I realized that I would
appear on the eve of an important event,
the 10th annual economic summit meeting
of the heads of state and government of
the seven major industrialized countries:
the United States, Canada, Japan, the
United Kingdom, the Federal Republic of
Germany, France, and Italy.

The first economic summit, which did
not include Canada or Italy, was held in
Rambouillet, France, in 1975. 1 doubt that
many people predicted then that Ram-
bouillet would lead to yearly meetings of
the leaders of the seven largest free-
world economies to discuss mutual
economic concerns. Certainly one of the
thoughts most remote from my mind then
was that I would become involved in the
9th and 10th summits. One of my first
assignments when I came to Washington
in July 1982 was to serve as the Presi-
dent's personal representative in prepar-
ing for the Williamsburg economic sum-
mit. That meeting was highly successful,
thanks to the major part the President
personally took in the preparations and
above all to his splendid presiding at the
actual sessions. For the past several
months, I have been increasingly ab-
sorbed in preparing for the London sum-
mit, which will be held June 7-9. In fact, I
returned only yesterday from Chevening,
near London, where the personal repre-
sentatives met for 2 days in their final
preparatory session.

I did not realize until recently that my
speech today would be near the anniver-
sary of another historic event of par-
ticular significance to this meeting and to
National Trade Week. Fifty years ago,
Secretary of State Cordell Hull shepherd-
ed through the Congress the seminal
Reciprocal Trade Agreements Act. Com-
ing 4 years after the Smoot-Hawley Tariff
Act had devastated world trade, and a
year after the United States had
"torpedoed" the London economic con-
ference, the Reciprocal Trade Agree-
ments Act was the first major step in the
emergence of the United States into

global economic leadership. It meant that
the United States was beginning to shift
from extreme protectionism toward
assertive, forward-looking efforts to
liberalize world trade. The act symbolized
Hull's strong bolief, which he had voiced
as a congressman during the First World
War, that "unhampered trade dovetails
with peace; high tariffs, trade barriers,
and unfair economic competition with
war."

A half century later, the world
economy has changed dramatically. It is
more complex. Yet the essential goal of
the Reciprocal Trade Agreements Act-
trade liberalization— remains one of the
central objectives of the United States as
we approach the 10th economic summit.
Just as Hull argued that beggar-thy-
neighbor trade policies begat the conflict
of World War I, we today are firmly con-
vinced that trade liberalization and a coor-
dinated approach to related economic
issues are vital to Western solidarity. In
the decades following Hull's stewardship,
we have learned collectively that there
can be no secure peace without economic
harmony.

It was this kind of thinking that led
former French President Giscard
d'Estaing to call the first summit meeting
at Rambouillet, and this is why it is so
vital today to continue regular consulta-
tions at the highest levels of Western
governments on issues that are basic to
peace and prosperity— issues such as
growth, trade, finance, money, develop-
ment, and economic security. Less than 2
weeks ago, Ambassador Brock, the U.S.
Trade Representative, convoked a highly
useful meeting of many of his main
counterparts to let their hair down and to
vet the problems facing the multilateral
trade system. Last week, Secretary of the
Treasury Regan met with 10 other finance
ministers for a comparable purpose
relating to international finance. But the
value of economic summits is that they go
beyond discussion of any single subject.

The summits afford leaders an oppor-
tunity to take account of the interrelation-
ships among the various aspects of
economic policy. Bilateral meetings can
accomplish part of this function. Bilateral
issues, however, tend to be relatively
sharply defined. In an interdependent
world, economic issues are more complex
and multilateral. Leaders, not their staffs,
must ultimately make the hard choices on
economic policy that affect not only their

electorates but also millions of people out-
side their borders. It is valuable for them
to hear directly from their counterparts
other, sometimes conflicting, ideas on how
best to approach mutual problems.

Just as important is the fact that
economic summits allow the heads of
government an unusual opportunity to
get a better sense of each other's larger
priorities, perceptions, prejudices, and
policies. While there is an abundance of
opportunities each year for trade and
finance ministers to meet, the annual
summits provide the only regular occa-
sion for the major Western heads of
government to confer on economic issues.

Evolution of the Summits

The main topic of my talk today is our
principal goals and objectives for the Lon-
don summit. Before I outline them, how-
ever, I will set the stage by sketching the
evolution of summits since President
Reagan took office.

Ottawa in 1981 was President
Reagan's first summit and, therefore, his
first opportunity to explain his domestic
economic policies to his summit col-
leagues. Already in place was much of his
program to promote sustainable, market-
oriented, noninflationary growth. The key
components of this program were, as they
are today, to reduce government spend-
ing; to change the tax code in ways that
provide incentives for individuals to
work, to save, and to invest; to reduce
government regulation; and to achieve
stable and moderate growth in the money
supply. At the time, the President's
strong emphasis on stopping inflation and
on shifting resources and their manage-
ment away from government and into
private control was seen by some as being
at best on the fringes of respectable
economic policy. Thus, at Ottawa the
President was received politely but skep-
tically.

The President also used the oppor-
tunity to highlight his concerns about the
relationship between economic relations
with Eastern countries and Western secu-
rity. Finally, at Ottawa the President
gave a preview of the approach he was to
articulate more fully at Cancun later that
year on managing the relationship be-
tween developed and less developed
economies.

At Versailles in 1982, the heads of
government were faced with a somber

Department of State Bulletin

ECONOMICS

economic tableau— falling output, rising
unemployment, and high interest rates.
The sole bright spot was lower inflation in
the United States. Concern about ex-
change rates led to agreement to develop
a framework in which the five countries
with special responsibilities for the inter-
national monetary- and financial systems—
namely the United States, Japan, the
F.R.G., the United Kingdom, and
France— could consult more effectively
about the effects of their domestic
economic policies on the international
economy. A study of the historical record
of exchange rates was also launched.
Finally, Versailles highlighted further the
pressing need for greater consensus on
East-West economic issues.

By the time of Williamsburg, develop-
ments in the American economy had
already begun to show the success of the
economic policies President Reagan had
first championed at Ottawa 2 years
earlier. The summit leaders expressed
confidence that economic recovery was
becoming a reality, with the United
States in the lead. They defined a
strategy by which, through a more open
trade and financial system, they could
grapple effectively with the legacies from
the 1970s of inflation, unemployment, and
debt. They agreed on ways to promote
greater convergence of economic perform-
ance, accepting thereby the conclusion
from the study of exchange rates that
economic convergence was essential for
stability of exchange markets. At
Williamsburg, the cry for massive govern-
ment intervention intended to control ex-
change markets was muted though not
quite stilled. On East-West economic
issues, the leaders pointed to a new con-
sensus based on work carried out in in-
stitutions such as the Organization for
Economic Cooperation and Development,
the North Atlantic Treaty Organization,
and the International Energy Agency.
Finally, stressing the interrelationships
among growth, trade, and finance, the
leaders agreed on the components of a
strategy for managing international debt
and for promoting a more open trade
system. These components included im-
mediate actions as well as others that
would be considered for the medium
term, such as a new round of multilateral
trade negotiations.

With this background on the evolution
of the last three summits, let me turn to a
discussion of our goals and objectives for
the next summit at London.

U.S. Objectives

The United States will pursue two prin-
cipal objectives at the London summit:

July 1984

First, to confirm that economic
recovery— not just in the United States
but in other summit countries— has taken
hold firmly and that we need to recommit
ourselves collectively to policies that will
ensure that growth will be sustained, will
not become inflationary, and will spread
to the rest of the world;

Second, to build on the strategy
outlined at Williamsburg for managing in-
ternational trade and financial problems
and to translate that strategy into a con-
crete program of action.

In a sense, London will be a transition
summit, marking the passage from a
period in which the task was to lay solid
domestic foundations for growth to one in
which our nations together, buildmg on
agreements at Williamsburg, can further
shape their v ision of the future of the in-
ternational economic system. Since the
beginning of his Administration, the
President has argued that the foundation
of a well-functioning international
economy must be policies in each of the
major countries to reduce inflation and to
expand the scope for individual initiative.
The thrust of his message has been that
the proper role of government must be to
remove domestic economic rigidities in
order to facilitate, not frustrate, adjust-
ment to changing circumstances, thus
creating new jobs and a durable
prosperity.

In contrast to the situation at Ottawa,
at Versailles, and even to some extent at
Williamsburg, the President's message
and, indeed, his economic program are
now more widely accepted among our
summit partners. The change in attitude
of some summit countries is striking in-
deed. Our partners now recognize that
the President's policies have succeeded
and that, through his contribution to the
past three summits, he has forged with
them a coherent strategy for sustainable,
noninflationary growth that is bringing
our nations out of the recessionary trough
of the early 1980s. Although further
reduction in market rigidities in many
countries will be slow and painful, all now
agree on its necessity and are working to
achieve it. Thus, the London summit will
provide an opportunity to review and to
take satisfaction from our achievements
during the President's first term, stress-
ing the consistency and continuity of pur-
pose that has characterized the
President's approach to both domestic
and international economic problems.

But the London summit will be more
than a summary or recitation of past suc-
cesses. Because summit leaders will start
their discussions already basically agreed
on the problems they face and on the ob-
jectives of their respective national

economic policies, London offers the addi-
tional and unique opportunity for leaders
to look beyond current problems and to
develop further a strategy that will con-
solidate economic recovery and advance
our objectives of more open world
markets.

Our two broad objectives at London,
then, are strengthening and spreading
recovery, and progress on international
trade, finance, and debt. Let me translate
these broad objectives into more specific
goals.

We expect that one of the main sub-
jects discussed at London will be the
economic situation and the outlook for
world recovery. There has been a broad
convergence of the economic perform-
ances of summit countries toward faster
growth and lower inflation. Summit coun-
tries grew on the average of 2.4% in 1983.
This contrasts with 0.4% in 1982 and 4.5%
forecast for 1984. Summit-country infla-
tion was 6.8% in 1982, 4.3% in 1983, and is
forecast to be 4.6% this year. Continued
non-inflationary expansion in summit
countries is essential to spur similar
growth in other industrialized countries
as well as in the less developed countries.

Thus, one of our chief tasks at London
is to explore ways to sustain this con-
vergence of summit-country economic
performance and to ensure that higher
growth and lower inflation spread to the
rest of the world. We believe the key
elements of our action plan should be:

First, to restrain government spend-
ing, thus allowing expansion of the
private sector;

Second, to promote stable, moderate
monetary growth, thus inducing lower
interest rates and increasing confidence
that inflation will be contained;

Third, to remove structural rigidities
that are inhibiting the growth of employ-
ment in some summit countries; and

Fourth, to maintain and enhance the
open trading system in order to foster
economic growth, particularly in the
developing world.

Concerns will undoubtedly be voiced
about U.S. budget deficits and the fear
that they will cause higher interest rates
that could choke off recovery and reignite
inflation in both industrial and developing
nations. With action now taken in both
the House and Senate on the President's
proposals for a "downpayment" on the
deficit, we believe we can promise real ac-
tion in the near future to reduce budget
deficits. We will point again to the
multilateral surveillance process, initiated
at Versailles and strengthened at
Williamsburg, as a forum for continuing

ECONOMICS

consultations on convergence. We will
also point out that the sizeable trade and
current account deficits of the United
States have made major contributions to
growth in other countries as their exports
to our market have risen. However, that
situation will not last forever, so it is
urgent that all countries pursue their ad-
justment efforts.

As regards the developing countries
with severe debt problems, all parties
must continue to fulfill their responsibili-
ties under the five-point debt strategy en-
dorsed at Williamsburg. The problem will
be manageable in the long run, as well as
the short, if each of us does his job.

Our objective at London is to confirm
that our strategy for managing LDC debt
problems on a flexible, case-by-case basis
is working and requires no fundamental
change. This strategy has worked suc-
cessfully to promote adjustment efforts in
debtor countries and has checked serious
disruption of the international trade,
finance, and monetary systems.

We believe this strategy is ap-
propriate for the medium as well as the
short term. There have been several sug-
gestions recently that our strategy lacks
a medium- to long-term component. In
fact, it has both. We believe the London
summit will offer an opportunity to ex-
pand and clarify the medium-term aspects
of the strategy agreed to at Williamsburg.
We will stress four major elements:

• The need for continued adjustments
by debtor countries with the support of
the IMF [International Monetary Fundi
and lending by commercial banks;

• The need to expand trade between
developed and developing countries to
promote growth in both and to assure
that heavy debtors will be able to earn
foreign exchange to sen-ice their debts
and to justify increased commercial bank
lending in the years ahead;

• The need for developing countries to
stimulate increased foreign direct invest-
ment to redress the imbalance between
debt and equity in their external finances
and to attract the financial, technological,
and management resources they need to
exploit future export opportunities; and

• The need for closer coordination be-
tween the International Monetary Fund
and the World Rank in order to make the
role of the Bank more consistent with
that of the IMP" in promoting adjustment
in developing countries, and in strength-
ening the Bank's contribution to longer
term development.

With respect to international trade,
the challenge for summit leaders at Lon-
don will be to consolidate the movement
toward worldwide economic recovery, to

promote early progress in liberalizing
trade and improving the trade system,
and to move forward toward new multi-
lateral trade negotiations to achieve more
comprehensive liberalization.

At the OECD [Organization for Eco-
nomic Cooperation and Development]
ministerial meeting last week, member
countries agreed that a new round of
multilateral trade negotiations is "of
the utmost importance to a strengthening
of the liberal trade system." They urged
expanded consultations with all GATT
[General Agreement on Tariffs and
Trade] countries and gave a high priority
to the GATT work program established in
1982 to lay the groundwork for the devel-
opment of a consensus on such negotia-
tions. We hope the summit will give a real
impetus at the highest political level to
this undertaking. The liberalization that
such negotiations can achieve is essential
in order to consolidate the future success
of the strategies for domestic growth on
which our countries are now embarked.

Finally, our objectives on East-West
economic relations at London are simple
and straightforward. We will seek to con-
tinue to work closely with our summit
partners and other allies to broaden our
consensus on prudent economic relation-
ships with the Soviet Union and the coun-
tries of Eastern Europe. We will urge
that work underway since 1982 in such
specialized organizations as the OECD,
IEA, COCOM [Coordinating Committee
for Multilateral Security Export Controls]
and NATO continues in order to make
that consensus as comprehensive as
possible.

In spite of the length with which I
have described U.S. goals and objectives
at London and the issues we expect to
tackle collectively, you most definitely
should not get an impression that we ex-
pect major breakthroughs at London that
will make headlines in The Wall Street
Journal, The New York Times, or the
Journal of Commerce. For at least three
reasons, I expect this not to occur.

First, if the problems discussed at
London were susceptible to easy answers
and quick fixes, there would be no reason
for the summit. The issues with which the
summit leaders wrestle are complex. Only
long-term approaches provide real solu-
tions, and long-term approaches are com-
plicated and difficult. Those who expect
blinding revelations and facile cures for
the world's economic ills will be disap-
pointed—not only in June at London
but perpetually everywhere.

In a repetition of the atmosphere
introduced by President Reagan at

Williamsburg, we expect that summit
leaders at London will discuss these
longer term approaches in an informal,
flexible manner without the rigidly struc-
tured agenda and prenegotiated com-
munique of most summits before
Williamsburg. Earlier summits focused on
detailed means to coordinate macro-
economic policies, reflecting a view that
the route to sustained growth lay in inter-
nationally concerted manipulation of
demand— so-called "fine tuning." These
efforts were disappointing and may have
contributed to the instability that only
now is being brought under control.
While our new approach to summitry may
produce fewer headlines, it seems to me
eminently more prudent and constructive.

The second reason that headline
hunters will be disappointed is that
disagreements make the best headlines.
As summit economies expand, scape-
goating diminishes; nevertheless, I expect
the stories from London to focus on ex-
pressions of concern about interest rates,
deficits, and debt crises. I urge that you
not be misled if that happens. Expres-
sions of concern, which indeed we all
share, do not necessarily mean disagree-
ment or disarray. While there will not be
agreement on every issue, I will be sur-
prised if there is significant disagreement
on an issue of major importance. So I sug-
gest that you look beyond the headlines,
read carefully the statements that are
issued, and draw your own conclusions.

Finally, I anticipate that no startling
news will come out of London because the
news deals with the present but the sum-
mit deals with the future. The real test of
the London summit's success will be
reflected not in next month's headlines
but in the months that follow; not in what
the leaders say at London but in what
they do in the months and years ahead
when the United States and our summit
partners seek to implement domestically
and internationally the policies sketched
at London. We have come a long way, in-
dividually and collectively, in the 50 years
since the Reciprocal Trade Agreements
Act, but there is still a long way to go.
London, like its predecessor summits, will
mark another, and I believe a significant,
milestone on our journey. ■

Department of State Bulletin

ECONOMICS

The American Trade Deficit
in Perspective

by Arthur F. Burns

Address before the Industrie-Club in
Dusseldorf on April 5. 1981,. Mr. Burns
is U.S. Ambassador to the Federal
Republic of Germany.

I very much appreciate the opportunity
to address this distinguished audience
today. The topic I have chosen to discuss
with you is the merchandise trade of the
United States with other countries. My
reasons for focusing on this subject are
not parochial. In the first place, it is im-
portant for Europeans to understand
that the strong recovery in America's
overall production and employment has
been accompanied by further deteriora-
tion in its foreign trade. Secondly, the
poor trade performance of the United
States in recent years reflects a dis-
equilibrium in the world economy as well
as in our domestic economy. Widespread
political strains have been the inevitable
results. The promises of last year's
Williamsburg summit with regard to in-
ternational trade and finance have not
been fulfilled. If anything, international
tensions arising from economic issues
have increased during the past year.

Major Causes of

the U.S. Trade Deficit

Let me begin by reciting some of the
essential facts about the foreign trade of
the United States. Until 1970, my coun-
try enjoyed a surplus in its merchandise
trade with the rest of the world. Since
then, with oil prices higher and competi-
tion from our trading partners keener,
trade deficits have been the rule. For a
time this served a constructive interna-
tional role in view of America's surplus
on other items in its international ac-
counts. But the trade deficit took a
quantum jump toward the end of the
1970s when it reached a rate of about
$30 billion per year— a rate that was
maintained through the first half of
1982. More recently, the trade deficit
has grown by leaps and bounds. It
reached an annual rate of $75 billion in
the final quarter of 1983 and is expected
to exceed $100 billion this calendar year.

To be sure, the deterioration in
America's merchandise trade is still
being offset by our traditional surplus on
trade in services and on investment in-

July 1984

come from abroad. Even so, the deficit
in our international current account —
which allows for these items — reached
over $40 billion during 1983 and ran at a
much higher annual rate in its final
quarter. The counterpart of this
dramatic current account deficit has
been a huge flow of funds from abroad
to the United States combined with a
sharp contraction in our traditional
capital exports. That is hardly a
welcome development for a nation with
the largest and richest economy in the
world.

There is a widespread belief in
American circles that many of our in-
dustries can no longer compete against
more efficient Japanese firms. There is
worry as well that American producers
are being victimized by unfair competi-
tion from low-wage producers in
developing countries and subsidized
products of European and other foreign
enterprises. Such explanations of our
foreign trade deficit contain an element
of truth but hardly more than that. The
principal causes of America's recent
trade deterioration are to be found
elsewhere — in the high value of the
dollar in foreign exchange markets, in
the faster rebound from recession in the
United States than in Western Europe
or Japan, and in the unavoidable need of
debt-ridden developing countries to prac-
tice austerity.

The strength of the dollar in foreign
exchange markets in the past few years
is well known in Europe. Between late
1980 and early this year, the dollar ap-
preciated about 30% against the Swiss
franc, 40% against the British pound,
50% against the German mark, 100%
against the French franc. The dollar's
appreciation against the Japanese yen
and Canadian currency was much less.
Nevertheless, taking the currencies of
the 10 major industrial countries
together, the dollar appreciated on the
average about 50% during that period.
The high cost of the dollar obviously has
made American goods less attractive to
foreign buyers, while the low cost of
foreign currencies has made foreign
products more attractive to Americans.
Although the dollar has weakened since
the start of this year, it still retains the
greater part of the appreciation against
other currencies that occurred after
1980.

Another major cause of America's
trade deterioration is the difficulty that
many developing countries have been ex-
periencing during the past 2-3 years in
borrowing abroad. By 1982 an increas-
ing number of commercial bankers and
other suppliers of credit finally realized
that they had been less than prudent in
accommodating — in fact, often even en-
couraging— the eagerness of developing
countries to pile up indebtedness. Once
lending to these countries was curtailed,
one after another of them found it im-
possible to meet their scheduled debt
repayments or even the interest due on
their indebtedness. To prevent outright
bankruptcy, their governments had to
plead for financial assistance from the
International Monetary Fund, other
governments, and the private financial
community; but such help could not
remove the need to practice aus-
terity— particularly, to cut imports and
expand exports. The nations of Latin
America, which have especially close
commercial ties with the United States,
were foremost among those suffering a
shortage of foreign exchange. Not sur-
prisingly, the dollar value of our exports
to Latin America was cut almost in half
between the first quarter of 1981 and
the final quarter of 1983.

A third factor in America's trade
deterioration is the uneven cyclical
development of the major industrialized
countries. Economic recovery began in
the United States toward the end of
1982 and gathered momentum rapidly.
The economy of Canada recovered about
the same time and advanced almost as
rapidly. Other industrial countries did
not do as well. Japan's economy con-
tinued to advance but at a diminished
rate. Great Britain and Germany
recovered more gradually than the
United States, while the rest of Western
Europe continued to experience stagna-
tion or recession. Because of the lag of
the recovery process outside the United
States, our exports to Europe and Japan
became very sluggish while our imports
soared — as always happens during the
expansion phase of the business cycle.

Other Contributing Factors

In addition to the several major causes
of America's trade deficit on which I
have dwelt — namely, the strong dollar,
the distress of developing countries, and
the rapid rebound of the American
economy — a host of other factors played
some part. Two of them deserve special
mention: first, the worldwide drop in oil
demand which forced OPEC [Organiza-
tion of Petroleum Exporting Countries]
members to cut back their imports; se-

ECONOMICS

cond, recent developments in world
agriculture — a subject to which I will
need to return— which also contributed
to the deterioration of America's foreign
trade.

The piling up of these unfavorable
trade developments has become a mat-
ter of widespread concern in the United
States. Farm income was already
depressed during the late 1970s; and
with foreign sales declining, it has plum-
meted since 1980. Moreover, the
shrinkage in exports of our manufac-
tured products resulted in a reduction of
both jobs and profits in numerous
firms — particularly those engaged in
producing machinery, civil aircraft, and
other capital goods. Meanwhile, the rise
in imports kept adding to the displace-
ment of workers involved in the
manufacture of various consumer as well
as capital goods.

Professional economists often look
upon such vicissitudes of trade as nor-
mal workings of a competitive market,
and they are apt to express confidence
that the difficulties will eventually be
corrected through the marketplace. In
principle, there is considerable justifica-
tion for such views.

As the economy of the United States
continues to expand, its rate of expan-
sion is bound to moderate. Meanwhile,
signs of economic recovery in Western
Europe, which have been gradually
reemerging, are likely to multiply. With
the gap in economic performance be-
tween Europe and the United States
narrowing, America's trade deficit will
tend to diminish. On balance, Latin
American developments should also be
less damaging to our foreign trade. Dur-
ing the past year, the heavily indebted
countries of Latin America have ex-
perienced significant improvement in
their current account balances with the
rest of the world. Hence, the recent
sharp reduction in their imports from
the United States can hardly be ex-
pected to become still larger. Moreover,
since the purchasing power of the dollar
over commodities appears to be ap-
preciably overvalued relative to other
currencies, it would not be at all surpris-
ing if the decline in the foreign exchange
value of the dollar that has occurred
since its January peak were moderately
extended over the next year or two. In
short, one can reasonably argue that the
marketplace is already releasing forces
that before long will diminish the
American trade deficit.

Relaxed thinking along these lines,
however, is rarely shared by American
businessmen, farmers, and workers who
happen to have been adversely affected
through foreign trade. Nor is it shared

by politicians — particularly in an election
year. Of late, American advocates of
restrictive trade policies have become
bolder, and their complaints about trade
practices of other countries have become
more strident. Their calls for new im-
port barriers are being echoed by similar
calls in Europe. After all, numerous
European industries have also ex-
perienced an economic setback in recent
years, and unemployment is now exten-
sive throughout Western Europe. With
the virus of protectionist sentiment
spreading, the need for economic
statesmanship both in the United States
and in Europe has become urgent.

America's foreign trade problem is
also Europe's problem, and it is impor-
tant for both Europeans and Americans
to try to see from an international view-
point the trade and financial issues that
have caused political tensions among us.
In the process of doing that, we are all
bound to find that what Americans
regard as their special problem involves
common international concerns that re-
quire better mutual understanding — and
often also corrective measures — on both
sides of the Atlantic.

Trade Issues

One of the problems that has been
especially troublesome in the relations
between the United States and Western
Europe involves agricultural trade.
Americans have long complained about
the protectionist thrust of the European
Community's agricultural policy — a
policy that relies heavily on price sup-
ports to maintain the income of its
farmers. Each year the Community's
member governments fix common prices
of various agricultural products. These
prices run above world prices. The
domestic market of the Community is
then protected by variable levies that
tend to keep out lower priced imports.
In part as a result of this policy, the
Community's share of America's total
agricultural exports has tended to
decline.

The decline would have been sharper
if the Community's restrictions had also
been applied to soybeans and soybean
products — which loom large in American
exports. This has been precluded by-
prior international agreements that per-
mit soybeans and their derivatives to be
shipped duty free into the Community.
That access has recently been threat-
ened by the proposal of the European
Commission to impose a consumer tax
on vegetable oils. Quite obviously, such a
tax would have much the same effect as
an explicit import barrier.

The American Government is also
troubled by the commission's proposal to
restrict imports of corn gluten — a prod-
uct used in animal feeds — which now
also enters the Community duty free on
the basis of previous agreements. Since
American farmers have not shared in
the recent economic recovery, concern
over restrictive measures against corn
gluten and soybeans has become acute in
the United States.

These new European proposals have
thus intensified a perennial complaint of
the United States— namely, that our
market is far more open to agricultural
imports than the Community's market.
There can be no denying, however, that
Europeans have some legitimate com-
plaints about American agricultural
policies. The United States, for example,
has long maintained import quotas on
dairy products — a protectionist measure
that has hurt European farmers. Again,
American wine producers have recently
been seeking congressional limitation on
wine imports.

The deplorable clamor for increasing
protectionism in agriculture is not only
interfering with the efficient use of labor
and capital. It may also release new in-
flationary pressures — directly by raising
food prices, indirectly by repercussions
on labor markets. Nor is this all.
Agricultural policies in Europe and the
United States are becoming a heavy
burden on governmental budgets. Pro-
grams for supporting farm prices and in-
comes cost the American Government
$28 billion in fiscal year 1983 — an enor-
mous increase over the preceding
2 years. The cost of supporting
agriculture has also increased rapidly in
the European Community, reaching over
$13 billion in 1983. Indeed, the member
governments of the Community are now
engaged in an anxious search for ways
of limiting the impact of agricultural ex-
penditures on their budgets — a search
that has caused severe political strains
in Europe.

Foreign trade in agricultural prod-
ucts is thus an intra-European problem
as well as a problem involving the
United States and Western Europe — for
that matter, much of the rest of the
world as well. A basic cause of this com-
mon problem is the tendency toward ex-
cessive production of various agri-
cultural products. Here the Europeans
have perhaps been more at fault than
Americans, for the agricultural support
programs of the United States have
usually included some incentives to cut
back production while European support
programs have not. In fact, the Com-
munity's disposal of its surpluses

Department of State Bulletin

ECONOMICS

through subsidized sales on world
markets has been a source of con-
siderable friction between the United
States and the Community.

As we look ahead, the problem of
oversupply may become more acute
because of continuing advances in
agricultural technology — especially in the
grain and dairy sectors. This is clearly a
problem that Community and American
farmers have in common. Although our
several governments recognize this, they
have not yet tackled together the
challenge posed by world overproduc-
tion. Fortunately, both the American
Government and the Community have of
late moderated their rhetoric on
agricultural trade issues, restrained
their actions, and tried quietly to resolve
their outstanding differences. The Ger-
man Government, in particular, has ex-
pressed firm opposition to a European
consumer tax on vegetable oils. It should
be a source of some comfort to both
Americans and Europeans that powerful
voices of reason are being heard at a
time when pressures on governments
from agricultural interests have become
so insistent.

Trade in steel products is another
perennial irritant in relations between
the United States and the European
Community. Problems in this area have
recently become more troublesome,
largely as a result of declining demand
for steel products during the recession
but partly also because of larger produc-
tion and exports by some developing
countries. In view of these changed
market conditions, steel firms on both
sides of the Atlantic have been forced to
curtail production, close some entire
plants, and release many workers.

In the early 1980s, American
steelmakers petitioned our government
for protection against rising steel im-
ports from the European Community.
The Americans argued that European
firms were benefiting unfairly from ex-
port subsidies and that some of their
products were being sold in the United
States below their fair value. If their
complaint had run the full course per-
mitted by American law, the result
would certainly have been a sharp reduc-
tion in European exports of carbon steel
products. Fortunately, mutual good will
prevailed over legal contests. After long
and difficult negotiations, involving both
steel producers and governments, an
agreement was reached in October 1982,
under which the Community undertook
to limit moderately its exports of certain
steel products to the United States
through the end of 1985.

July 1984

This agreement has worked reason-
ably well thus far, but it has by no
means quieted the steel trade issue. The
specialty steel branch of the American
industry, which was not covered by the
1982 agreement, has also suffered
declines in profits and employment in
recent years. Its urgent appeal for relief
under American law led in July 1983 to
the President's approval of temporary
quotas and extra tariffs for specialty
steel imports. This action was severely
criticized in Europe — in part, no doubt,
because it came so soon after the
Williamsburg summit. At any rate, the
European Community responded, as it
had the right to do under GATT
[General Agreement on Tariffs and
Trade] rules, by limiting certain imports
of equivalent value from the United
States. At times during the past year,
the specialty steel problem threatened to
provoke a serious rift in the relations
between the United States and Western

Europe. Once again, however, the mat-
ter was settled amicably thanks to the
willingness of the concerned parties to
make the necessary compromises. Un-
fortunately, both American producers
and their organized workers have now
joined in fresh appeals for restricting
imports of steel generally. Difficulties
over steel trade thus remain with us.

In view of the restlessness that con-
tinues to afflict international steel trade,
there can be no escape from the conclu-
sion that arrangements such as
Americans and Europeans have recently
succeeded in working out are merely
temporary expedients. The critical fact
is that both the United States and
Europe face a common problem of over-
capacity in their respective areas — a
problem that is being accentuated by
rising imports from the more advanced
of the developing countries. It is only by
addressing together these broader issues
that we can have a reasonable chance of

50th Anniversary of
Reciprocal Trade Act

DEPARTMENT STATEMENT,
JUNE 12, 19841

Today is the 50th Anniversary of the
Reciprocal Trade Act of 1934, with
which the State Department has a par-
ticular connection. The act marked the
start of 50 years of U.S. trade liberaliza-
tion. Remarkably the act came only 4
years after the Smoot-Hawley Tariff Act
of 1930, which raised average U.S.
tariffs to 55% and which is credited by
many economists with turning a minor
recession into the Great Depression.
Recognizing the damage being done both
to our economy and to our international
relations, Secretary of State Cordell
Hull persuaded Franklin Roosevelt to
change course.

The trade liberalization which began
with the Reciprocal Trade Act enabled
world trade to grow almost 50% faster
than world production from 1948 to
1973, raised world exports to today's
level of $2 trillion, and will see average
industrial country tariffs reduced to
3%-4% by 1987.

As modern technology brings the
world closer together in ways both
beneficial and threatening, trade ties
become ever more important. When we
exchange goods and services, we also
exchange ideas. If a man builds a better

mousetrap, the world beats a path to his
door not merely to buy mousetraps but
also to find out the secrets of his suc-
cess.

As U.S. trade has grown in impor-
tance to our economy, others have
realized that in fields such as agriculture
and high technology, much worth
emulating lies behind our abundant out-
put. And as imports have challenged
traditional U.S. industries, we too have
learned that in areas as diverse as inven-
tory control, employee relations, and
quality standards, there is much abroad
that we can adapt to our benefit. The
lowering of the barriers among nations
in this way benefits us all.

We have come far in the 50 years
since passage of the Reciprocal Trade
Act of 1934. But we still have far to go.
Tariff and other trade barriers still limit
the world's trade, and challenges in new
areas such as services trade and high
technology remain to be taken up. We
hope to build on the past 50 years' ac-
complishments so that in another 50
years our successors can look back on
the 1980s as having marked an equally
important beginning in world trade
liberalization.

'Read to news correspondents by acting
Department spokesman Alan Romberg. ■

ECONOMICS

finding lasting solutions to our perennial
problems in steel trade.

Financial Concerns

Because of limitations of time, as well as
of my own knowledge, I shall not com-
ment on other specific trade issues— as
in the case of copper, footwear, machine
tools, and wines— that are being ac-
corded public attention in this election
year. But in view of my past involve-
ment in central banking, I do want to
make a few observations about financial
questions surrounding America's trade
deficit that have stirred wide interest
and controversy.

Let us take first the case of the
dollar's appreciation. It has served to
reduce inflationary pressures in the
United States, but it has had the op-
posite effect in Europe— since a very
large part of Europe's imports is
denominated in dollars. On the other
hand, the dollar's appreciation has
severely hurt America's foreign trade,
while it has benefited the trade of other
countries— including those in Western
Europe. Discerning Europeans recognize
that the trade deficit of the United
States has served, in effect, to drive the
world economy forward. They have not,
however, rejoiced over their trade ad-
vantage, since they realize that the
dollar's strength will not last indefinitely
and, therefore, fear that the industrial
structure of their countries could
become distorted in the process of
responding to a temporary trade ad-
vantage.

Europeans naturally prefer a stable
dollar to one that oscillates in buying
power, and so for that matter do
Americans. But neither Europeans nor
Americans have as yet found an accept-
able method of returning to the kind of
stability in exchange rates that existed
before the abandonment of the Bretton
Woods system. In a world in which
capital movements often overshadow
trade movements and in which inflation
rates of individual countries diverge
widely, central bank intervention in
foreign exchange markets— a remedy
that is still popular in some political
circles— cannot accomplish anything
beyond smoothing out the very short-run
fluctuations of exchange rates.

To be sure, many Europeans feel
that the appreciation of the dollar has
been largely due to the relatively high
interest rates in the United States.
Their argument typically runs as
follows:

First, high American interest rates
are damaging European economies by
attracting to the United States funds
that otherwise would be directed to
capital investment at home.

Second, European interest rates are
also higher than they would be in the
absence of the outflow of capital to the
United States.

Third, the gigantic debt burden ol
developing countries is being com-
pounded by the high American interest

Fourth, the United States could cor-
rect these difficulties by bringing down
its interest rates, and this could best be
accomplished by reducing the enormous
deficits in the American Government's
budget.

Finally, the American economy as
well as the entire international economy
would benefit in the process.

This line of reasoning has not been
confined to Europeans. Many Americans
have shared it— which is not surprising
since the above argument does embody a
substantial element of truth. I must
nevertheless point out that the above
argument is incomplete. It overlooks the
fact that the dollar is a haven of safety
for Europeans and others in times of in-
ternational political turmoil such as we
have experienced in recent years. It
overlooks the fact that there are causes
of high interest rates beyond budget
deficits. It overlooks the fact that the
high American interest rates have not
proved an obstacle to a robust recovery
in the United States, including a revival
of both residential construction and
business investment in fixed capital.
More important still, the European
argument overlooks the fact that profit
opportunities in the United States have
become distinctly more favorable than in
Western Europe. Even with American
interest rates remaining as they are, if
European governments moved more
boldly to improve prospects for business
profits in their countries, the chances
are that the flow of capital to the United
States would be materially checked—
indeed, that American capital on balance
might well start moving to Europe.
The American Government can
surely be helpful to the European
economy as well as to its own by pro-
ceeding'resolutely to reduce its pro-
jected budget deficits. That is fully
recognized by now both by the Reagan
Administration and the Congress. I am
entirely confident that a significant
budgetary correction will be accom-
plished before long— perhaps even by
this summer but certainly by next

spring. As awareness of this forthcom-
ing development spreads through finan-
cial markets, current pressures on in-
terest rates will tend to be eased and
financial investments in the United
States may thus become less attractive
to foreigners. But Europe can also do its
part— namely, by improving the environ-
ment for business risk-taking, innova-
tion, and capital investment. In short,
European governments as well as the
American Government could take ac-
tions—as, indeed, some are already
doing— to reduce the many difficulties
that have been caused by high interest
rates and the strong dollar. To some
degree, with prospective profits in
Europe beginning to improve, a
wholesome process of economic
revitalization may already be getting
underway.

While the United States will have to
emphasize one set of policies in dealing
with the dollar's strength and Europe
quite another, their approaches can and
should be similar in dealing with the in-
debtedness of the developing coun-
tries_again a problem that the United
States and Western Europe have in
common. Fortunately, this has been
recognized on both sides of the Atlantic.
Indeed, speedy action by the Interna-
tional Monetary Fund and the Bank for
International Settlements, working in
concert with the governments of the
leading industrial countries as well as
with their central and commercial
bankers, has staved off what might
otherwise have been an international
financial collapse. These constructive
rescue missions have not, however,
solved the underlying debt problem of
the developing countries, since the
debtors are being burdened with interest
charges that some— perhaps many— of
them may find it impossible to meet.

All concerned parties have some fur-
ther contribution to make. As govern-
ments of the industrial countries con-
tinue to work at fostering sustainable
growth of their economies, the develop-
ing countries will gain opportunities to
increase their exports. That, along with
efforts to bring down interest rates and
curb protectionist impulses, is fun-
damental. For their part, commercial
banks— especially the large institutions
that play a leadership role in interna-
tional finance— need in their self-
interest, as well as for the sake of
stability in the international financial
system, to do more than they have yet
done to ease the payments problem of
debtor countries.

Typically, of course, when commer-
cial bankers run into a debt problem of

Department of State Bulletin

ECONOMICS

one of their business customers, they
devise means of scaling down the size of
the debt or the interest on it, and at
times even accept the debtor company's
stock in place of all or part of the
outstanding debt. That business ap-
proach is suggestive of actions that
could be taken in handling the in-
debtedness of some of the more
necessitous developing countries.

One possibility would be for a dozen
or so of the major international banks to
proceed on their own to cut substantially
the interest rates charged to those of
the less developed countries that have
run into insuperable difficulties in
complying with the financial program
worked out in their behalf by the Inter-
national Monetary Fund. Such voluntary
interest-rate reductions could not in
practice be generalized to cover all
banks, since many of the smaller banks
would balk at following the initiative of
the major banks. That, however, is not a
fatal objection, since the relief granted
by the major international banks would
of itself reduce appreciably the financial
burden facing necessitous debtors.

In any event, leadership by the
major international banks in interest-
rate reductions is not the only possible
route to relief. For example, near-term
interest payments due from seriously
troubled countries could be transformed
into debt obligations that extend suffi-
ciently into the future to provide the
debtors essential breathing space.

Moreover, the governments of the
United States and Western Europe can
play a more direct role in helping the
less developed countries to reestablish
their credit worthiness and resume
economic growth. Legislation calling for
renewal of our system of trade
preferences for developing countries
that is now before the Congress is im-
portant in this regard. The European
Community is likewise involved in
renegotiating the Lome convention
which permits duty-free access of raw
materials from developing countries.
The existing European and American
systems of general trade preference
deserve extension and some further
liberalization.

The developing countries must,
nevertheless, be constantly reminded
that it is decisively to their own benefit
to expose their economies in greater
degree to market forces. Continued
reliance on preferential treatment is a
dead-end policy, and one that will not be
accepted indefinitely by the industrial
nations. Developing countries must be
particularly encouraged to pursue finan-
cial policies that will attract foreign in-

July 1984

vestors, besides enticing back some of
the enormous amounts of capital that
their own frightened citizens and
businesses had moved abroad. However
difficult such policies may be, there is no
other way for the developing countries
to achieve the full partnership that they
seek in the investment and trading
system of the modern world.

Conclusion

In bringing this address to a conclusion,
I want — even at the cost of some repeti-
tion— to leave several basic thoughts
with you.

First of all, it is well to keep in
mind that prior to last year, the biggest
current account deficit that any country
had ever experienced in a single year
was about $15 billion. The $70-$80
billion shortfall that my country is
headed for this year is awesomely dif-
ferent from anything experienced in the
past. Since America's trade problem in-
volves Europe deeply, it is essential that
Europeans and Americans seek better
understanding of their mutual economic
concerns and work together toward
their resolution.

Second, as previously suggested, the
United States can best contribute to
easing the trade and debt problems that
now confront the world by moving
decisively toward greater fiscal
discipline. This needs to be combined
with a skillful monetary policy that
tempers the robustness of economic
growth and thus guards against infla-
tionary pressures. In Europe the
foremost need is for confidence-building
measures that foster job creation, so
that Europe can contribute more
significantly to the recovery of world
trade.

Third, since the problem of interna-
tional indebtedness is also without
precedent — either as to dimension or
disruptive potential — it is highly impor-
tant to seek ways of enlarging upon the
progress that has been achieved in the
current phase of crisis management. We
need, in particular, constructive ini-
tiatives that will enable the world to ride
out difficulties even if economic
developments in the years ahead should
prove disappointing.

Fourth, the danger of protectionism
has been growing despite some improve-
ment in the condition of the interna-
tional economy. In that regard, both
Americans and Europeans must be con-
cerned about the effects of protec-
tionism on the developing world as well
as about the weakening of our own

economies through further protectionist
actions. Even more important than that,
we need to keep in mind that enmities
created by trade restrictions at times
spill over into the political arena and
may even affect the capacity of the part-
ners in the North Atlantic Alliance to
cooperate as effectively as they should
in meeting challenges to their common
security.

Fortunately, the several dangers and
needs that I have emphasized are in-
creasingly recognized on both sides of
the Atlantic. Indeed, some have already
been dealt with or are at present being
considered constructively. I see,
therefore, ample basis for hope of a bet-
ter economic future than has been our
lot in the past few years.

In the course of my life, I have seen
many crises come and go. I have also
seen crises that were widely anticipated
fail to materialize. It is always unwise to
underestimate the capacity of human in-
genuity and good will to resolve
economic problems— whether they be
domestic or international. Let us not
underrate that capacity now. As
Americans and Europeans we know in
our hearts that the ethical, political, and
cultural values that we share in common
are overwhelmingly more important
than the trade or financial issues that
now and then excite us. ■

Japan Eases
Restrictions
on Yen

Following is a statement by
Secretary of the Treasury Donald T.
Regan on May 29, 198J,.

I am here today to announce an agree-
ment that will have important, far-
reaching, and positive implications for
the U.S. economy, the Japanese
economy, and the world economy. It
should strengthen our economic and
financial ties and the international
monetary system as Japan and its cur-
rency assume a financial role ap-
propriate to the free world's second
largest economy.

This report marks the culmination of
an intensive series of meetings between
officials of the Treasury Department and
the Japanese Ministry of Finance which
has taken place over the last 4 months.
The report is a joint product; Japanese

ECONOMICS

Ministry of Finance Takeshita and I
have each reviewed and accepted
report, which we believe is fully respon-
mandate we gave the work-
ing group on yen/dollar issues in our
joint press announcement last
November. Minister Takeshita is releas-
ing simultaneously the same report in
Japan. While the report does represent

direct result of these most recent ef-
it really is the product of discus-
sions and events over a longer period of
time.

Since President Reagan came into
office, we have been discussing with the
Japanese exchange rate and capital
market issues. President Reagan per-
sonally conveyed our deep concern about
these issues during his talks with Prime
Minister Nakasone in Tokyo last
November. In their joint press an-
nouncement, President Reagan and
Prime Minister Nakasone expressed
their "mutual commitment toward
specific steps to achieve open capital
markets [to] allow the yen to reflect
more fully Japan's underlying political
stability and economic strength as the
second largest economy in the free
world." The President has continued to
follow this issue closely, providing con-
tinuous leadership to our efforts in this
area.

Our discussions with Japan have
been based on our concern that Japan's
role in the international financial system
was not commensurate with its role as a
great economic and trading world power
and that Japan's restrictive policies in-
hibited the use of yen internationally,
adversely affected the yen/dollar ex-
change rate, created distortions and in-
efficiency in Japan's capital markets,
and posed unfair barriers to U.S. firms
seeking to operate in Japan. Although

there have I n difficult moments in

these discussions, I am pleased to say
that the report being released today con-
tains major new commitments and policy
measures by Japan that we believe will,

fully implemented, redress man)
of the problems which have existed.
mportant policy changes an
nounced by Japan will occur in three
broad the Euroyen market, the

operation of Japan' tic capital

market, and the access of foreign finan-
cial ii he Japanese capital
market. I would like to outline what is
involved in each of these areas and cite
sonic of the specii • hich are

I he d( relopmenl of the Euri

market is the area most important to
the internationalization of the yen. The

Ministrj of Finance lias, in this report.

made the basic commitments and deci-
sions necessary to allow for the develop-
ment of a Euroyen bond and banking
market, where non-Japanese can borrow
in yen outside Japan and investors will
be able to buy a wider range of yen-
denominated instruments.

Specifically, in the Euroyen bond
market, this will include: enlarging the
number and types of issuers of Euroyen
bonds for the first time and setting up a
framework which we believe will be con-
ducive to the development of the
Euroyen bond market over time.

Regarding the development of a
Euroyen banking market, by the end of

["foreign and Japanese banks will be
authorized to issue from their offices
outside of Japan short-term negotiable
Euroyen loans to nonresidents. There
will be no limits on the amount or tim-
ing, no prior approval required.

Substantial changes in the operation
of Japan's domestic capital market
policies were also announced by the
Ministry of Finance. As part of the con-
tinuing process of liberalizing Japanese

capital markets, the ministry affirmed
its intention to deregulate interest rates,
focusing first on large denomination
deposits and then on small deposits. We
believe that these and other important
changes in Japan's domestic capital
market will allow market forces to play
an increasing role in that market.

The Ministry of Finance also an-
nounced a number of important changes
pertaining to the ability of foreign finan-
cial institutions to do business on an
equal footing with Japanese financial
firms in Japan's capital market. These
changes include such measures as allow-
ing foreign banks to participate in trust
banking, increasing the transparency of
the policies affecting the operations of
foreign financial institutions in Japan,
and eliminating swap limits. They will
create effective competitive oppor-
tunities for foreign financial institutions,
reflecting the Ministry of Finance's com-
mitment to the principle of national
treatment. ■

Review of East-West
Economic Relations

by W. Allen Wallis

Statement before the Subcommittee
on Europe and tin Middle East of the
House Foreign Affairs Committee on
March 29, 1984. Mr. Wallis is Vnder
Secretary for Economic Affairs.1

The Administration welcomes this oppor-
tunity to review with you and your com-
mittee the current status of East-West
commercial, financial, and credit relations.
As requested, I w ill focus my comments
on the status of sanctions on the U.S.S.R.
and Poland, the status of our followup
activities in the Organization for
Economic Cooperation and Development
(OECD) and the International Energy
Agency (IEA) on East-West commercial
and energy relations, in the Coordinating
Committee for Multilateral Security Ex-
port Controls (COCOM) on technology
transfer, and in NATO on the security
implications of East-West relations.

Overall Approach

Before getting into specifics, I should
first like to say a few words about the
Administration's overall approach to

East- West trade. One of the principal ob-
jectives of this Administration's policy
toward East-West economic relations is to
ensure that our commerce with the East
remains consistent with our broad securi-
ty concerns. We want to avoid economic
exchanges, particularly transfers of tech-
nology, that contribute to the military
potential of the U.S.S.R. and its allies or
that subsidize the heavily militarized
Soviet economy and thus alleviate their
difficult resource allocation decisions.

Our policy is not one of economic war-
fare against the Soviets. We do not seek
the "collapse" of the Warsaw Pact eco-
nomies; we could not cause this in any
case. This Administration believes in
trade between the West and the com-
munist nations— as between any na-
tions—where that trade is conducted at
prevailing market prices and terms,
where there is a balance of advantages,
and where the transaction does not con-
tribute to the strategic advantage of the
Soviets. Western consumers and pro-
ducers, both agricultural and industrial,
can benefit from trade within such an
overall framework.

We fully appreciate that the best ap-
proach to East-West economic policy is

ECONOMICS

one that is cooridinated with our allies
and principal economic partners. Working
over the past 2 years in COCOM, at the
OECD, at NATO, and at the economic
summit, we have achieved a significant
degree of convergence in our economic
policies vis-a-vis the East. The areas of
agreement include strengthening controls
on the export of strategic technology, en-
hancing the security of Western energy
supplies, and tightening the credit terms
that apply to East-West trade. Overall, in
a move away from the economics of
detente, the United States and its partners
have explicitly recognized that the
Soviets use some forms of trade to en-
hance their military capability and, conse-
quently, that the West must be vigilant to
ensure that its economic relations are con-
sistent with its security interests.

It is these two themes— first, a rec-
ognition of the security implications of
our trade with the East and, second, an
understanding that it is most effective to
coordinate our policy with that of our
partners— that underlie most of my com-
ments today.

Sanctions Policy

U.S.S.R. Let me now turn to a discus-
sion of our sanctions policy, focusing first
on the Soviet Union. As you know, the
United States announced sanctions
against the Soviet Union in the wake of
its invasion of Afghanistan. In 1981, fol-
lowing the imposition of martial law in
Poland, President Reagan announced
suspension of Aeroflot service, the closing
of the Soviet purchasing commission,
oostponement of negotiations on a new

' ong-term grains agreement, suspension
Df negotiations on a maritime agreement
ind a new regime of port access, and a
complete review of exchange agreements,
ncluding refusal to renew some
agreements. He also expanded controls
)n exports to the Soviet Union of oil and
,. jas equipment and technology and then
suspended action on all license applica-

1 1 ions to sell either high-technology oil and
?as equipment or technology to the
! iJ.S.S.R. To demonstrate our dissatisfac-
tion with the lack of progress toward
-econciliation in Poland, the President
ater decided to expand to subsidiaries
Hind licensees abroad our sanctions on the
[ ;xport of oil and gas equipment and

' I technology.

These steps demonstrated that the
r> Soviet Union cannot enjoy a normal busi-
ness relationship with this country after

> nternational behavior which we find
:otally repugnant. While many of our
sanctions remain in effect, they are kept
ander constant review to ensure that

they continue to serve their intended pur-
pose. In other words, they should not un-
fairly penalize the ability of American
firms to compete in world markets or
damage this country's reputation as a
reliable supplier. A case in point is the
sanctions on oil and gas equipment which
were removed November 13, 1982. The
partial grain embargo against the
U.S.S.R. was also lifted, and subse-
quently the United States negotiated a
new long-term grain agreement with
Moscow.

Our economic measures against the
Soviet Union have had, and will continue
to have, an effect; but the impact remains
difficult to quantify. It is clear that the
measures have imposed a cost on the
Soviets for their behavior and have forced
a readjustment in our bilateral economic
relations. There have, of course, also been
costs to U.S. businesses and agriculture
from lost orders and trade diversion.
With respect to the best publicized of this
Administration's economic sanctions
against the Soviet Union— those related
to construction of the export gas pipeline
from Siberia to Western Europe— the
Soviets completed the pipelaying phase of
its project last year, installed a small
number of compressor sets, and have
transported relatively small amounts of
gas over the line. The Soviets have met
their initial contract delivery commit-
ments to West European customers for
the gas, using surplus capacity in pre-
viously existing pipelines.

However, we should recall that the
Soviets originally planned to complete the
project, including both laying the pipe
and installing all associated compressor
stations, by 1984. We now estimate that
this task will not be finished until 1986.
We believe much of this delay can be at-
tributed to our sanctions. Moreover, in
evaluating the effectiveness of our sanc-
tions, it is impossible for us to ascertain to
what extent the Soviets have been forced
to divert resources from other priority
projects simply to meet this delayed
target for pipeline completion.

Poland. Our Polish sanctions included
the following actions: a freeze on new of-
ficial credits, the suspension of debt-
rescheduling negotiations and Poland's
most-favored-nation (MFN) status, opposi-
tion to Poland's membership in the Inter-
national Monetary Fund, suspension of
landing rights for regularly scheduled
flights of the Polish airline LOT, with-
drawal of Polish fishing rights in U.S.
waters, suspension of travel between
Poland and the United States under the
Marie Sklodowska Curie Joint Travel
Fund (which finances joint scientific

research projects), and suspension of the
Export-Import Bank's line of credit in-
surance for Poland.

To encourage national reconciliation in
Poland, the Administration has adopted a
step-by-step approach on our Polish policy
designed to reward positive steps by the
Polish Government on the political, econ-
mic, and human rights fronts. Thus, in
November, the President endorsed two
limited steps to ease economic sanctions
on Poland. First, we agreed with our
allies to enter into debt-rescheduling
discussions, and we are continuing to par-
ticipate in Paris Club discussions with the
Poles. We also agreed to permit Polish of-
ficials to engage in discussions with
private U.S. fishing interests about poten-
tial fishing arrangements. Those steps
represented a response to positive
developments in Poland and specifically
last summer's successful papal visit and
the release of the majority of political
prisoners. On January 16, in response to
Lech Walesa's call for an easing of sanc-
tions, the President decided to take twn
further steps. We will permit 88 Polish
charter flights between the United States
and Poland this year, and we have lifted
the ban on fishing by Polish vessels in
U.S. waters. As soon as the legal re-
quirements for economic cooperation with
U.S. fishing interests are met, the Poles
will be issued an allocation of fish.

An evaluation of the effectiveness of
the Administration's sanctions on Poland
is very difficult since the Polish economy
had already been adversely affected by
the liquidity crisis and bank retrenchment
in late 1980. If we believe the statements
of the Polish Government, however, our
Polish sanctions have exacted a huge toll
on the Polish economy, with figures of $10
billion and up in lost production and ex-
ports quoted by Polish authorities. The
actual economic impact of U.S. sanctions
has certainly been more limited, but there
can be no question that the Polish
Government has paid a heavy price for
the suppression of human rights.

Without a doubt, our most effective
economic sanction has been the embargo
on new official credits. This has unques-
tionably made Polish access to trade
financing more difficult so that an increas-
ing share of Poland's imports from the
West has been on a cash-and-carry basis.
Nevertheless, for purely financial
reasons, lending to Poland would have
fallen off sharply even without official
sanctions, because the market recognizes
Poland as a very poor credit risk. Our go-
slow approach on debt rescheduling has
also impeded Polish efforts toward nor-
malization of financial relations. On the
other hand, Poland has not made any

July 1984

ECONOMICS

significant payments on debt to Western
governments since early 1982, and this de
facto moratorium has eased the Polish
payments burden. Meanwhile, Poland has
used the excess hard currency earned by
reducing imports and boosting exports to
make substantial payments to private
bank creditors, which have signed three
debt-rescheduling agreements. In 1981,
1982, and 1983, net Polish payments to
Western banks totaled some $4.7 billion.

The other U.S. sanctions on Poland
have been less significant economically,
though all have had a symbolic impact.
The Department of Commerce is now
completing a study to assess the effects of
MFN withdrawal on exports to the
United States, and we shall make that
study available to the subcommittee upon
completion later this spring. The
preliminary assessment is that suspension
of MFN reduced Polish exports to the
United States, and we are now evaluating
its exact impact. The suspension of Marie
Sklodowska Curie funds has curtailed,
though not eliminated, scientific ex-
changes with Poland.

Allied Participation

I would like to say a few words about
allied cooperation on sanctions measures.
In response to Soviet actions in Poland,
the European Community took steps in
December 1981 to reduce imports of 56
Soviet products, including vodka, furs,
diamonds, salmon, caviar, tractors, and
other products. Those sanctions reduced
Soviet exports of those items by $122
million in both 1982 and 1983. The sanc-
tions were not renewed when they ex-
pired at the end of 1983. With respect to
Poland, the NATO allies agreed in
January 1982 to halt new official credits
to Poland and postpone debt-rescheduling
negotiations. Our allies remain unwilling
to offer new credits to Poland, though
debt-rescheduling talks in the Paris Club
were resumed last fall.

While the impact of these economic
measures has, in general, been less impor-
tant than ours, in joining us— even with
symbolic measures— the alliance has,
nonetheless, sent an important political
message on Western unity to Moscow and
Warsaw. Moreover, this message has
been reinforced by allied agreement in
late 1982 to review key aspects of East-
West economic relations in the OECD,
COCOM, NATO, and IEA and to initiate
several key studies. These efforts have
produced a number of concrete results
and in the process substantially increased
allied awareness of the economic and
security implications of East-West trade.

For example, as a result of our com-
mon efforts in the OECD, we are now

able to monitor more closely the West's
trade and financial relations with Eastern
Europe and the U.S.S.R. to help ensure
that these relations remain on a sound
market-oriented footing. The OECD work
program seeks to improve information ex-
change through enhanced data collection
so that more comprehensive, integrated
debt and financial statistics can be placed
at the disposal of Western policymakers.
On the analytical side, efforts are well
underway to integrate more fully the
organization's trade and financial
analysis, and the quality of the reports
has already measurably improved. For
the future, we intend to press for ex-
panded OECD work in a number of areas,
including the balance of advantages in
East- West trade with special emphasis on
countertrade practices.

Export Credit Arrangement

The OECD Export Credit Arrangement
has been the focus of our ongoing efforts
to reduce official export credit support to
the Soviet Union and Eastern Europe.
These efforts are part of our broader ob-
jective of reducing credit subsidies
worldwide. With the successful negotia-
tion of a new OECD Export Credit Ar-
rangement last October, we acheived our
principal objectives including holding the
line on rates to category I countries (that
is, relatively rich countries, including the
Soviet Union).

This consolidated the gains made in
1982, when participants in the arrange-
ment agreed to raise minimum rates for
countries, including the Soviet Union,
from 8.75% to 12.4%. With that action and
the general decline in market interest
rates over the past 2 years, credit sub-
sidies to the Soviet Union from most
OECD countries has been greatly re-
duced. The new arrangement provisions
also feature automatic adjustment to
average market rates, which will help
prevent any future subsidization.

NATO and COCOM

In parallel efforts over the past year in
the NATO Economic Committee, we have
sought to underscore the security aspects
of our trade and financial relationships
with the Soviet Union and Eastern
Europe. I am pleased to report that there
is a stronger consensus than ever that
economic relations should not be permit-
ted to contribute to Soviet and Warsaw
Pact military capabilities. In their com-
munique last June, the NATO ministers
stressed that East- West economic rela-
tions must be consistent with our shared
security interests and that we must exer-

cise caution in the transfer of technology,
dependency relationships, and other
economic dealings that could contribute to
the military capabilities of the Soviet
Union.

This heightened awareness of the
security ramifications of East- West
economic relations has also had a very
positive impact on COCOM negotiations.
In COCOM discussions over the past
year, we have studied ways of improving
surveillance and control over Western ex-
ports that have strategic or military
relevance to the Warsaw Pact nations. At
an April 1983 COCOM high-level meeting,
we explored a number of ways in which
the multilateral system of controls could
be strengthened. Specifically, our part-
ners agreed that several categories of oil
and gas equipment and technologies war-
rant consideration in the context of the
current list review for possible inclusion
in the multilateral embargo. Ad referen-
dum agreement has already been reached
for addition to the COCOM list of several
other U.S. oil- and gas-related proposals.
Finally, COCOM has agreed to the
establishment of a U.S. -proposed inven-
tory of emerging technologies to be
monitored for their potential strategic ap-
plications.

Perhaps our greatest success in
COCOM, however, has been the signifi-
cant headway in strengthening the effec-
tiveness of the COCOM embargo.
Governments of our COCOM allies are
now giving increased attention to the
problems of enforcement and are
devoting signficantly increased resources
to such activities. Moreover, a high priori-
ty has been placed on resolving the third-
country diversion issue. Cooperative ef-
forts are underway to ensure that third
countries are aware of the risk of illegal
diversions through their territories to the
Warsaw Pact.

International Energy Agency

In the energy sector, the President has
urged European countries to consider the
security implications of the new Soviet
gas pipeline and to examine indigenous
alternatives for increased West European
requirements for natural gas. While the
Western dialogue on energy security and
natural gas dependence was strained by
controversy over the Siberian pipeline
and U.S. sanctions, a serious dialogue has
emerged about European natural gas re-
quirements, the potential of such alter-
native sources as Norway, and the need
to improve preparedness against gas sup
ply disruptions.

Last year the combined OECD-IEA
Secretariat, completed an "Energy Re-

Department of State Bullet

ECONOMICS

quirements and Security Study" whose
most important analysis centered on
natural gas in Western Europe. IEA and
OECD ministers subsequently endorsed a
set of policy conclusions drawn from the
combined Secretariat study, including a
set of interrelated principles on the
secure development and use of natural
gas. The IEA study had a real impact on
the thinking of Western energy
policymakers responsible for planning
Western energy supplies for the 1990s
and beyond, and there is a new emphasis
on developing secure energy sources, in-
cluding OECD gas fields.

Conclusion

To summarize my remarks, the formula-
tion and implementation of U.S. policy
toward economic relations with the Soviet
Union and its allies is, necessarily, a
balancing act. Consider a spectrum. On
one extreme is unrestrictive economic in-
tercourse with the East, nothing held
back. On the other extreme is a total em-
bargo—nothing traded, financed, or ex-
changed. Scarcely anyone holds to either
extreme. The question for policymakers is
where to draw the line. My testimony has
reviewed the Reagan Administration's
approach to drawing the line. The Admin-
istration's objective as contained in a
recent White House press release on one
aspect of East-West trade is: "to insure
that there is an appropriate balance be-
tween national security and export in-
terests."

We are working continually with our
allies to carry out that objective. As you
can see, we have made substantial head-
way over the past 2 years in advancing
our concerns about the conduct of East-
West economic relations and in
strengthening our collective approach to
East- West economic policy formulation.
There can be no doubt that Western
security interests have benefited directly
as a result. Much, nevertheless, remains
to be done, as reflected in the future work
programs of our key multilateral institu-
tions and NATO. We intend to persevere
in all the areas relevant to Western
security, knowing full well that consensus
building among democratic countries
must be a long-term commitment.

'The complete transcript of the hearings
will be published by the committee and will
be available from the Superintendent of
Documents, U.S. Government Printing Of-
fice, Washington, D.C. 20402. ■

The Logic and Politics
of the Next Trade Round

by Denis Lamb

Address before the World. Trade Con-
ference in Chicago on April 25, 1984. Mr.
Lamb is Deputy Assistant Secretary for
Economic and Business Affairs.

It is no accident that trade has been a
major engine of growth in the world
economy since World War II. Successive
rounds of tariff negotiations pro-
gressively lowered duties from stultify-
ing depression-era levels. With lower
duties and improved transportation,
world trade expanded considerably
faster than world output until the reces-
sion of 1981.

Looking ahead, it is clear that open
markets, permitting renewed growth in
world trade, will be essential to a
healthy world economy. This is par-
ticularly so in light of the debt crisis
facing a number of developing countries.
To service their debts, these countries
must expand exports.

But, unfortunately, the nation's com-
mitment to free trade is being tested as
seldom before. The recession hit many
industries hard at a time when difficult
adjustments to a dramatic change in the
relative cost of energy— and accompany-
ing phenomena— were incomplete. As
recovery continues, some of the same in-
dustries are facing strong import com-
petition. And now, added to this
pressure, comes the cry to "do
something" about the enormous U.S.
trade deficit.

This would seem to be a particularly
poor time to contemplate further trade
negotiations. Yet serious thought is
being given to a new negotiating round.
Why?

One reason is protectionism itself. If
we do not move forward toward freer
trade, increased protectionism is the
likely result.

A second reason is unfinished
business from previous trade rounds.
Tariff-cutting has not yet gone far
enough to eliminate some significant
residual impediments to achieving
economic efficiency through trade;
agriculture continues to escape full
GATT [General Agreement on Tariffs
and Trade] discipline; and the trade
rules have to be further adapted to
today's trading realities.

July 1984

A third reason is that trade in areas
of new importance, including services
and high technology, has an impressive
potential to create jobs and wealth if we
are wise enough to seek liberalization.

Finally, negotiations can provide the
incentive and the means to integrate the
newly industrializing, and increasingly
trade-oriented, developing countries into
the GATT system.

Protectionism

Protectionism takes many guises. The
latest is the call to reduce the U.S. trade
deficit by curbing imports. But the
deficit has not interfered with a strong
U.S. recovery and rebounding corporate
profits. Its root causes lie in the strong
dollar; the vigor of our recovery and
time needed to extend it to our major
trading partners; and the precipitous
drop in U.S. exports to key Latin
American debtor countries. Protection is
no solution, nor is the deficit a reason to
defer negotiations. I argue the opposite.
The deficit provides a strong impetus to
move forward with a new round. Think
of a new round as an innoculation
against the disease of self-defeating pro-
tectionism.

Tariffs

A second reason for contemplating a
new round prominently concerns tariffs.
Heretofore, the heart of trade negotia-
tions in the GATT has been reciprocal
tariff cuts, primarily among developed
countries. We can be proud of the
results. Average U.S. duties after the
full Tokyo Round tariff cuts are phased
in will be about 4.5%. European Com-
munity tariffs will average a little over
5%. Today, exchange rate fluctuations,
shipping, insurance, and interest costs
loom larger in most decisions whether or
not to import than do tariffs at these
low levels. Yet some tariffs remain a
major deterrent to trade.

Some elaboration of this point is in
order, since not much is heard about
tariffs these days. Many of us are aware
of high duties in developing countries.
Their import-substitution policies, based
on these duties and other barriers, are a
major impediment to expanded world
trade. But the access of developing
countries to markets in the North is also

ECONOMICS

restricted. Although three-quarters of all
U.S. duties are less than 5% and only
1% exceed 20%, fully 14% of the goods
we purchase from the LDCs [less
developed countries] are assessed duties
of 20% or more. Were textile imports
not limited by quotas as well as duties,
the share of developing countries'
shipments assessed high duties would be
even larger.

Other developed countries have even
more restrictive tariffs. For instance,
Canada's average duty on imports from
developing countries is 11%, and more
than one-fifth of its imports from these
countries enter at rates above 20%.

Tariff escalation— the stair-stepping
of duties upward as the degree of pro-
cessing increases— is still prevalent in
the developed countries. Raw material
imports are frequently duty free. If a
processed product is dutiable at 10% and
the raw material for that product enters
duty free, then the effective rate of pro-
tection for the processing operation can
be two, three, or even four times
greater.

The United States would seem to be
relatively "clean" on tariff escalation,
since only about one-quarter of U.S.
duties exceed 5%. But consider this com-
parison. The GATT has calculated that
average U.S. duties on industrial raw
materials after the Tokyo Round will be
just under 2%. On semifinished
manufactures, however, our duties will
average 6.1% and for finished manufac-
tures, 7%.

European Community averages are
almost identical but conceal greater
escalation. Many sensitive products are
not restricted by high duties but by tight
quotas. The Community has thus
lowered its average duty in trade-
weighted terms without lowering its pro-
tection.

More than half of Japanese duties
and three-quarters of Canadian duties
are 5% or above. In the Japanese case,
8% exceed the 20% level.

Thus, when the developing countries
express concern about tariff escalation
or high duty levels in the developed
countries, the figures suggest their con-
cern is legitimate. More important
perhaps, they also suggest that we still
have something to bargain with on
tariffs.

Under the rubric of unfinished
business we also want to tackle
agriculture again and to tend to the
broad trade rules on subsidies,
safeguards, counterfeiting of traded
goods, and other matters.

Agriculture, though hardly a new
area of concern, has never been brought
under full GATT discipline. Although

there are valid reasons for regarding
agriculture as a special case, the time
has come to introduce more order into
agricultural trade. The degree of sub-
sidization in the trade is both an avoid-
able drain on treasuries in exporting
countries and a distortion of incentives
for production in importing countries.

New Areas of
Trade Importance

A third reason for a new trade round is
the need to tackle new areas of trade
importance. From the U.S. vantage
point, a major attraction of a new trade
round will be a focus on services and
high technology.

Services are of growing importance
in international commerce. Banking, in-
surance, and other financial services;
engineering, communications, data proc-
essing, and telecommunications services
all contribute to a modern economy.
Given the diversity of trade in services,
it will be difficult to develop principles to
govern this trade and encourage its ex-
pansion. But it must be done, or history
indicates that an array of restrictions in
highly protected national markets will
fragment services trade, stifle competi-
tion, and raise prices. Services need to
be an important part of any trade
negotiation that aims to contribute to
global prosperity.

High-technology goods involve both
exciting opportunities for gains from
trade and special problems. For exam-
ple, we have seen at least one case of a
preemptive tariff increase instituted
where a new product had barely reached
the market, and government involve-
ment in high technology can be of con-
cern. These and other problems of trade
in high-technology goods deserve special
consideration as a new trade round
takes shape.

The Challenges of a
New Trade Round

More difficult than the why of a new
round of trade negotiations is the how.
The problems are considerable. It will
not be easy to adapt the GATT
mechanism, designed at a time when
trade in manufactured goods was the
paramount concern, to today's more
complex world. It will be a challenge to
involve the developing countries in the
game of tariff negotiations— a game
they have until now largely refused to
play.

The political problems at home will
be considerable. In addition to the
general climate of protectionism, there
is the fact that some of our most sen-

sitive sectors have to be on the table for
negotiations to work.

The developing countries— if they
are to lower import barriers— will want
concessions from us on items like tex-
tiles, shoes, and steel. The Japanese— if
they are to open their market to agri-
culture, high technology, and other com-
petitive U.S. products— will want to be
paid. The Europeans— if they are to give
us any satisfaction on agricultural
trade— will want curbs on our ability to
protect our own farmers.

Lest we think too much in terms of
bargaining, it is important to bear in
mind that it is in our own interest to
lower protection for the most highly pro-
tected of our industries. As a general
rule, protection in one sector diverts im-
port competition to others. More
precisely, while the economics and
mathematics are complicated, it turns
out that high tariff protection for some
industries under a floating exchange
rate regime means negative protection
for those with low duties. That's right,
"negative protection." Roughly two-
thirds of U.S. duties are already at or
below our 4.6% average. Only 11% are
above 10%. Low-duty industries, and
American exporters would be better off
if every single U.S. duty were set at
zero.

Alas, economic logic is often at odds
with political reality. Highly protected
industries in the United States tend to
be labor intensive and politically sen-
sitive. The sectors that will benefit
directly from tariff concessions are in
many cases less labor intensive or less
vocal politically. This suggests the
need— in conjunction with preparations
for a new round— to look more closely at
the process of structural adjustment, in-
cluding its long-term benefits and in-
terim costs.

If domestic resistance can be sur-
mounted, the problem in launching a
new trade round becomes attracting
others to the bargaining table. The
developing countries are formally ex-
empt from reciprocity in trade negotia-
tions. This is explicitly stated in Part IV
of the GATT and was reaffirmed in the
Tokyo Round. The idea is that develop-
ing countries are not expected to cut
tariffs as much as developed countries.
However, many developing countries ap-
pear to have expanded their notion of
nonreciprocity. They argue that they
should not be expected to cut tariffs at
all, at least not when they are having
balance-of-payments difficulties and
debt-service problems.

Yet developing countries need to
lower their import barriers if they are tc

Department of State Bulletin

ECONOMICS

progress. The developing countries that
have progressed most rapidly, and best
weathered the recession, are also the
most open to trade. Most of the East
Asian and Southeast Asian countries
have recovered smartly from the reces-
sion through export-led growth. In con-
trast, the Latin American economies,
which have emphasized import substitu-
tion and lower levels of trade, have
proved less resilient.

The import substitution approach to
development is now largely discredited
among serious students of such matters.
Many developing countries have recog-
nized the drawbacks of import substitu-
tion and have moved toward freer trade
of their own volition. Many have been
encouraged to do so by the International
Monetary Fund and the World Bank in
the context of needed stabilization and
structural adjustment programs. But the
pace has been slow.

The crucial importance of attracting
the developing countries to the bargain-
ing table lies in the linkages. If the
economic health of the developing coun-
tries is not restored, our economy will
suffer as well. The developing countries
provide our fastest growing export
markets, and 3 of our top 10 export
destinations are LDCs. Indeed, 1983 ex-
ports to our top 30 markets after
Canada and Japan were divided almost
equally between developed and develop-
ing countries.

Unless the developing countries ex-
pand their exports enough to both serv-
ice their debts and restore more normal
import levels, they are likely to face
political unrest on top of their economic
woes. But unless they can be persuaded
to use the exchange rate instead of im-
port barriers and subsidies to balance
their trade, both their imports and ex-
ports are likely to be inadequate.

In short, the stakes are high. Trade
negotiations offer developing countries
the opportunity to gain greater market
access in industrial countries at the
same time they are reducing tariff and
nontariff barriers in their own interest.
The challenge is to help them see it in
this light.

Working out the modalities of a
negotiation with Western Europe and
Japan also poses problems. Europe's
high unemployment increases political
pressures to protect sectors pressed by
import competition. U.S. demands in
agriculture also strain the European
Community's delicate balance of in-
terests on a sensitive issue.

Japan has taken the lead in calling
for a new round, and President Reagan
endorsed Prime Minister Nakasone's ini-

■V July 1984

tiative. But the balance between those in
Japan who would use a new round to
leverage further market-opening
measures and those who would use it to
delay has yet to be tested.

Conclusion

The problems I have talked about
today— of breaking new ground, deter-
mining how to deal with our own sen-
sitive sectors, persuading the developing
countries to negotiate, overcoming
European hesitation, and testing the
commitment of the Japanese— are each
formidable. Not all of them can be
resolved before a new round starts. Yet,
if we are to hold back the pressures of

protectionism, getting started is, itself
politically important.

But little is likely to happe n until
those in the private sector with a strong
interest in trade liberalization make
their voices heard. To neglect the
defense of free trade is to court the risk
of case-by-case protectionis m and a pro-
longation of the global debt problem. It
is to lose opportunities which a new-
style trade round will give to U.S.
growth industries. Ultimately, launching
a new round depends squarely on the
support of a private se ctor eager to con-
front the challenges and reap the bene-
fits of a changing— arid growing— world
economy. ■

Foreign Policy: Its Impact
on Agricultural Trade

by W. Allen Wallis

Address before the Board of Directors
of the United States Feed Grains Council
in Houston on March 7, 198k- Mr. Wallis
is Under Secretary for Economic Affairs.

It is a pleasure to be able to begin by ex-
pressing the Reagan Administration's
hearty support for the work of the
United States Feed Grains Council. You
support the private export-marketing
system, and you develop export markets.
I have read the positions on public policy
that you adopted 2 years ago. They are
models of reason, common sense, and
sound policy.

The theme of your meeting, "strat-
egy for transition," gives me an oppor-
tunity to talk about what the Reagan
Administration is doing to encourage a
transition to a more competitive trading r
system for agricultural products.

The explosive growth in world agr i-
cultural trade during the 1970s has gi ,ven
way to much slower growth in dema nd
but without a corresponding slowdown in
production. Consequently, prices ar e
soft, stocks are increasing, and gov ern-
ments are under pressure to "do f some-
thing." Some argue that we shou) d pro-
tect our market share through bi lat eral
or multilateral arrangements. Others
argue that we should stabilize r jrices.
Still others advise us to hide b ehind high
price supports and import bar riers. Some
say that we should resort to 'interna-
tional markets only when wf > need to
work off the burden of mist ,akes in our
domestic programs. These forces are

powerful. If they have their way, the
transition v /e are in will be to govern-
ment-orgar lized and government-
managed ' trade in agriculture. Govern-
ments wf juld fix market shares and
prices, a .nd international trade would
become a stepchild of the world's
domes' „ic farm programs.

Tr iere is, however, another possibil-
ity—-' -i far better possibility. We can
ackr iowledge that we already have too
mu- ch government participation in inter-
na' cional agricultural trade. We can eom-
m .it ourselves to work together toward a
r nore market-oriented system, free of
distortions, based on comparative advan-
tage. We can permit market forces to do
their work and thus achieve efficient
allocation of world resources.

I want to analyze with you today the
prospects for these two competing out-
comes. My analysis is divided into three
parts: first, a brief look at the starting
point, world agricultural markets as they
operate today; second, a review of the
Reagan Administration's efforts to
assure our farmers and exporters a fair
shot at those world markets; and finally,
the implications of our international pro-
grams for the domestic farm program.

World Agricultural Markets

Those of you who believe as I do in the
efficiency of markets and in the magic of
the price system for organizing economic
behavior may be distressed by what I
must say in describing the current status
of international markets for agricultural
products.

ECONOMICS

Consider first sugar. Only about 30%
of sugar produced enters into interna-
tional trao'e, and about 38% of that 30%.
is traded u nder long-term contracts or
other closed arrangements. The other
62% of the S'0%, or less than 20% of the
total, must aibsorb the full burden of
price fluctuations. The price-stabilization
efforts of the international Sugar Organi-
zation—of whic h the United States is a
member— have failed totally. In part this
is because the E'uropean Economic Com-
munity maintains' high support prices
and heavy export subsidies, which since
1976 have transfer med the European
Community (EC) fr om a net importer of
sugar to a supplier of one-third of the
"residual free" mark'et exports in 1982.
In addition, U.S. sug.u" producers have
enjoyed our own price' support program,
protected by tight quovtas.

Consider coffee, America's favorite
beverage. Coffee is regu lated by an in-
ternational commodity ag reernent par-
ticipated in by the United' States and 72
other countries, representi ng virtually
the entire coffee trade, botl i exporters
and importers. The Internat ional Coffee
Organization (ICO) attempts to stabilize
coffee prices through the use of export
quotas. In recent years, coffee prices
have been relatively stable, but the suc-
cess of the ICO in stabilizing pr.'ces in
the face of cyclical overproductio n has
resulted in stockpiles of coffee so large
that they hang over the market lik'e the
sword of Damocles.

With coffee goes cream. Only ab out
one-tenth of world dairy production i, s
traded on international markets, and
most of that consists of heavily subsi-
dized products, such as butter and nonl at
dry milk. About 85% of the trade in-
volves export subsidies. Support for
dairy production has become a very
costly business for consumers and
governments. Support prices in the
United States and the EC are set far
above domestic and international market
clearing prices, and they generate moun-
tains of stockpiled surplus, currently
representing about one-quarter of a
year's domestic production. It is small
comfort to know that the United States
refrains from dumping this surplus on
the thin international market. Our par-
ticipation in the international market has
been limited to foreign aid and occasional
subsidized sales for demonstration effect.

The picture for grain is somewhat
different, and many people point to the
grain trade as an example of the free
market at work. In fact, the international
grain market is characterized by a few
suppliers— the United States, the EC,
( lanada, Australia, and Argentina ac-
counted for over 95%- of exports in the
1982-83 marketing year. Many countries,
including Canada and Australia, sell their

grains through government marketing
boards. The EC, the third largest wheat
exporter, offsets high support prices
with substantial export subsidies. Grain
exporters are increasingly using bilateral
long-term agreements to lock in markets
by political means. In 1982-83, about
one-third of all wheat traded on the
world market moved under long-term
agreements.

International markets for agricultural
goods are dominated by commodity
agreements, stock overhangs, quota sys-
tems, government-to-government
agreements, and government marketing
boards.

There are, however, markets— about
which you know much more than I— that
march to a different drummer, at least
on the export side. In feed grains, the
United States has a 60%-70% share of
the total world market. Your council is
not a government agency but an organi-
zation of competitors. Your 1981 policy
statement is clear in its opposition to
commodity agreements for feed grains.
Even in this trade there are government
interventions— the 1973 embargo that
severely damaged our reputation as a
reliable supplier, the subsidies some pro-
ducers enjoy, the threats to access we
have heard recently from Europe; but by
comparison it is a good example of the
competitive market at work.

Efforts to Liberalize
Agricultural Trade

The challenge we face is to open other
markets to greater competition. Since
government intervention is the problem,
we must deal with governments when
we seek to liberalize agricultural trade.
This is where foreign policy and the
State Department become involved with
other U.S. agencies, especially the U.S.
Trade Representative and the U.S.
.Department of Agriculture (USD A).
'Lhose three agencies, strongly supported
bj ' President Reagan, are working
together with other countries, one at a
tim e or in groups, to reduce distortions
in ti 'ade and permit each country to pro-
duce and sell according to its com-
parat ive advantage. The going is slow, in
part because it is not always possible to
put ou.r objectives for agricultural trade
ahead of all other objectives.

You may be interested in our efforts
with fou.r countries or groups of
countries .

Japan Japan is the largest pur-
chaser of 0 ui' agricultural products.
Japan bougiht over $ti billion worth of
agricultural products from us last year.
That was abo ut 15'? of all American
agricultural e.\ ports. These sales result
in part from yt 'ars of prodding the
Japanese to ope n their markets.

Progress has been made. For ex-
ample, Japan has reduced the coverage
of its import quotas from nearly 500
products in the 1960s to only 27 today.
Japan's overall average tariff rates are
below those of the United States and the
EC. We cannot ignore, however, Japan's
remaining barriers to U.S. agricultural
exports. The further reduction or
elimination of agricultural trade barriers
in Japan and an expansion of imports
would bring clear benefits to the
Japanese people. Consumers suffer in
practice what economists teach in theory,
for in the end it is consumers who pay
the price of protectionism. Tokyo house-
wives pay more than they should for
beef, chicken, pork, milk, eggs, rice, and
bread.

Lower trade barriers, of course,
benefit American farmers as well as
Japanese consumers. (In general, both
partners to trade benefit; otherwise they
would not trade.) If Japan were substan-
tially to expand access to its markets for
imported beef and citrus, we expect that
our exports— now $439 million for those
two products— could expand significantly
over the next few years. And you need
not be concerned that selling more beef
to Japan might mean a smaller market
there for feed grains. After all, cattle
must eat, and to the feed producer it
makes little difference whether the steer
is fed in Omaha or Osaka.

Beef and citrus are just examples.
Japan has benefited dramatically from
the world's open trading system. We will
continue to urge that Japan fulfill its in-
ternational obligations and open its
markets more broadly.

European Community. The 10 na-
tions of the European Community con-
stitute another excellent market for the
United States. Our agricultural trade
surplus with the EC amounted to $4.6
billion in 1983. Feed grains, nongrain
feed ingredients, and soybeans for
livestock represent the bulk of our
agricultural exports to the EC.

At the same time, through its export
subsidies, the European Community's
common agricultural policy — the CAP —
has become the source of the most
serious distortions of agricultural trade
in the world. The CAP relies on a com-
plex, expensive system of high domestic
prices and variable import levies to pro-
tect the European farmer. These ensure
high production. Heavy export subsidies
are then used to dispose of the surplus.

When world supply outruns the
world demand, as now. world agricul-
tural prices decline and supply should ad-
just. In the United States, this usually
happens (dairy products being the major
exception). Most U.S. Government pro-
grams seek to use the market to cut pro-
duction, to build stocks, and to place a

Department of State Bulletin

ECONOMICS

safety net under farm income. In con-
trast, European farm prices are set
without reference to the world market
arice; they have increased almost every
vear in an effort to keep up with general
inflation. The result is that for many
farm commodities the domestic EC price
has been as much as twice the world

J price. Production has soared beyond
capacity to consume at home, creating
huge surpluses. The surpluses are
lumped on world markets with whatever
subsidies are needed to move them. They
depress world prices generally and com-
oete with our products in third coun-
tries.

The EC's high-price, high-subsidy
system thrusts a major portion of the
;rue costs of the system upon its
competitors. The U.S. Department of
Agriculture estimates, for example, that
;he CAP costs us close to $6 billion per
/ear in lost farm export earnings.

CAP spending is driving the Euro-
>ean Community into bankruptcy, pro-
viding effective pressure for reform of
he CAP. We hope that the reform will
>roduce a policy less distortive to trade.
3ut some of the specific proposals now
wing considered would transfer more of
he costs of the CAP to countries outside
he EC.

The EC Commission has made pro-
wsals that would endanger our soybean
rade and restrict our corn gluten feed

8'xports. It has proposed a consumption
ax on vegetable fats and oils designed to
itimulate EC butter consumption by
naking margarine more expensive. Coin-
idently, it would raise money for other
arm programs. The commission has pro-
rased a tariff quota on nongrain feed in-
iredients to limit further market growth.
Soybeans and nongrain feed ingredients
epresent trade valued at almost $5
million, about 60% of U.S. agricultural ex-
>orts to the EC.

We have warned the EC that we will
lefend our agricultural trade. Last year
ve reluctantly subsidized sales of wheat
lour and of butter and cheese to Egypt
>n terms permitting our products to com-
>ete with the EC's export subsidies.
Also, we have used USDA's export
redit subsidy programs— so-called
blended" credits— to make inroads in
narkets now held by subsidized pro-
lucers. There is no enthusiasm in the
Administration for following the Euro-
jeans down the export subsidy path; we
lo not wish to see bad policies beget
nore bad policies.

But there are limits to our patience.
The EC leaders meet March 19-20 in
Daris. They must keep in mind the depth
>f our concern and the strength of our
esolve. We have conveyed these con-
ems to the EC on many levels. Sec-
retary Shultz, Secretary [of Agriculture]

Block, and Ambassador Brock [U.S.
Trade Representative] made our views
known in no uncertain terms at the
December 9 meeting in Brussels with the
EC Commission president and five of his
commissioners. In January our Em-
bassies repeated the message. I want to
take this opportunity to stress that we
will take action to protect our trade in-
terests if the EC unilaterally implements
CAP reform measures that restrict our
access to their market.

If my good friend Sir Roy Denman,
the EC representative in Washington,
were here, he would accuse me of being
unfair. So, even in his absence, let me
restore the balance. The European budg-
etary crisis has forced the European
Commission and the member countries
to take a serious and critical look at the
common agricultural party policy. They
acknowledge the importance of getting
EC support prices down to world market
levels and of holding them there. They
recognize the wastefulness of overpro-
duction and subsidies. As I said a mo-
ment ago, this budgetary crisis may have
a silver lining for all of us interested in a
more competitive market for agricultural
products.

Developing Countries. In the long
run, the big opportunity for U.S. farm
exports will be in the developing coun-
tries. As countries develop, their pur-
chasing power grows and creates larger
markets for our products. The prospects
for feed-grain exports, in particular, are
staggering. The Food and Agriculture
Organization of the United Nations
estimates that LDC [less developed coun-
try] imports of coarse grains for feed will
increase sixfold between the mid-1970s
and the turn of the century. This poten-
tial market is but one economic dimen-
sion of our overall interest in self-
sustaining economic growth among the
developing countries.

The free play of the market is essen-
tial to sound and balanced economic
growth. Developing countries will maxi-
mize their domestic production only
when their farmers have an incentive to
produce. They must receive a remunera-
tive return for their work. Market prices
and access to inputs such as fertilizer
and adequate "infrastructure" are all im-
portant. We use our food aid agreements
to encourage and assist developing coun-
tries to meet these objectives.

Unfortunately, many developing
countries do everything possible to dis-
courage agricultural production. Too
often they follow policies 180° away from
those followed by the European Com-
munity. The Europeans generate huge
surpluses with high support prices and
high prices to the consumer. The
developing countries impose low farm

prices on the producer and subsidize food
prices for the urban consumer. Instead
of surpluses, the LDCs have chronic—
and growing— shortages. This may seem
to be to the advantage of U.S. ex-
porters—but remember the definition of
demand you learned in your basic
economics course: the amount consumers
are willing and able to buy at a given
price.

LDC debt-servicing difficulties have
reduced foreign exchange available for
imports, including food. The United
States has been a leader in developing a
strategy to deal with the debt problem.
The International Monetary Fund (IMF)
is playing a major role in this strategy.
Fundamentally, the burden falls on the
developing countries themselves to
restore balance to their economies. A
healthy agricultural sector is one key
feature. But adjustment does not happen
overnight. Increased IMF resources, in-
cluding the $8.4 billion from the United
States recently approved by the Con-
gress, will help tide over the developing
countries. With this help, they will buy
more U.S. agricultural products. As I
told a congressional committee last fall,
the IMF bill was partly farm legislation.

Financing helps only in the short
term. In the longer run, the developing
countries must earn the money
necessary to service their debts and pay
for their imports, including food. Protec-
tionism, whether practiced by developed
countries such as ourselves or by the
developing countries themselves, impairs
the ability to earn the foreign exchange
the LDCs need to meet their obligations.

U.S.S.R. and China. In discussing
our efforts with Japan, with the Euro-
pean Community, and with the develop-
ing countries, I have portrayed the
Reagan Administration's efforts to
reduce the political element of
agricultural trade and replace it with a
less political, more market-based system
of trade. It is the genius of the market
system that transactions are carried out
according to prices offered and accepted
by actors who need not know anything
about each other except the information
contained in prices. In most cir-
cumstances, the market will efficiently
match buyers and sellers, establishing
prices which will reflect the relative scar-
city of the product and the demand for
it. But there are exceptions. In the case
of agricultural trade, our long-term
agreements with the Soviet Union and
China are evidence of those exceptions.

Long-term agreements— especially
between governments— are not the pre-
ferred way to develop markets. Like
other government activities, they tend to
lock in a relationship on political
grounds, diminish the flexibility of the

ECONOMICS

market, and disadvantage the efficient
supplier.

But the Soviet Union and China are
not your ordinary buyers. Their import
needs can be enormous, and each tends
to act as a single purchasing unit in
meeting its needs. Political as well as
economic factors influence their buying
decisions. The potential for market dis-
ruption is high. To minimize the scope
for disruption, the United States has
long-term agreements with these two
countries, specifying a minimum annual
purchase and an upper limit beyond
which there must be government-to-
government consultations. We believe
these arrangements serve our interests.

The rose is, however, not without its
thorns. The very existence of a govern-
mental agreement creates links between
our grain trade and our overall bilateral
relations with the Soviet Union and
China. That link can be an irresistible
temptation, of which the grain embargo
of the previous administration is a vivid
example. President Reagan has promised
that he will not repeat that error. He has
signed the Durenberger amendment
guaranteeing contract sanctity for agri-
cultural trade. But when the time rolls
around to negotiate minimums, or ceil-
ings, or annual offers with the Soviets,
there is, inevitably, a discussion of the
"signal" each option will send. Foreign
policy considerations never are com-
pletely out of the trade picture when
governments are in that picture.

Multilateral Efforts. In addition to
our work with the four countries or
groups of countries that I have described
—Japan, the EC, the LDCs, and Russia
and China— we are working also on a
multilateral basis to improve the rules of
agricultural trade. The General Agree-
ment on Tariffs and Trade (GATT) is the
focal point of these efforts. Five rounds
of multilateral negotiations in the GATT
have made great strides in liberalizing
trade in industrial products, but they
have done little for agriculture. Our
trade representative, Ambassador Brock,
has proposed a new round that would ad-
dress the problems we have in agricul-
ture, as well as those in services and
high-technology products.

There is no shortage of opportunities
to improve agricultural markets. The
most important opportunities involve ex-
panding access to markets by reducing
quotas, tariffs, variable levies, and ex-
port subsidies. Other important issues in-
clude export credits, means of settling
disputes, the link between production
subsidies and exports, food aid, trade
preferences, and technical standards and
practices.

It is not clear yet what shape this
new round of multilateral neKotiations

might take, or whether there is enough
international support for a new round to
be productive. But a better trade climate
for agriculture is a top priority on our
trade agenda. We are encouraged by the
support we have received from the Japa-
nese. When Prime Minister Nakasone
and President Reagan met last Novem-
ber, the Prime Minister personally sug-
gested that agriculture be included in a
new trading round. The Europeans are
understandably reluctant, since we
would insist that greater discipline over
export subsidies be a key element of any
new agreement, but nevertheless they
are thinking about it.

Implications for Domestic Policies

As we strive toward a more market-
oriented international system, we must
examine our domestic policies to see if
they serve to advance or to hinder these
efforts.

Government's economic programs
must be based on sound expenditure,
tax, regulatory, and monetary policies.
We should seek to ensure that govern-
ment interferes with the market
mechanism as little as possible. If we are
interested in export markets, our
domestic support prices must be held to
levels that permit American production
to meet and beat world prices. Support
prices and other programs should pro-
vide a safety net to help cushion the
shock of catastrophies. They should not
be a featherbed for the most efficient or
a bomb shelter for the least efficient.

It goes without saying that if we are
to be successful in opening foreign
markets, we must ourselves avoid resort-
ing to protectionist pressures and gim-
micks. Just as we object to protectionism
in others, we should not expect them to
welcome it in us, nor should we be sur-
prised if they retaliate or use our actions
as an excuse to justify their own protec-
tionism. American agricultural markets
are more open than those of most coun-
tries, but we have our share of highly
protected sectors: meat, dairy, and
sugar, for example.

Historically American farmers have
supported free trade and American
farmers have helped shape American
policies on international trade. U.S.
agriculture was the beneficiary. We
should keep in mind that for other coun-
tries to buy our products, we must buy
theirs. This is especially true of the
developing countries who are tremen-
dously important to U.S. farmers, since
they will be the most dynamic market
for U.S. farm products.

To conclude, let me return to your
theme: "strategy for transition" and the
two possible outcomes I outlined at the

beginning of my remarks. Our examina-
tion of the current state of world mar-
kets for agricultural products revealed
heavy government intrusion in the func-
tioning of these markets. In contrast, the
Reagan Administration's approach to our
major trading partners on agricultural
trade has sought consistently to free up
markets and peel away the overlay of
government. Progress is slow and often
frustrating. But our experience within
the United States is encouraging.

Just in the past 5 years, competition
has broken out in the U.S. economy. Air-
lines made the headlines first, and the
benefits to the traveling public are clear.
Trucking is coming along but more
slowly. Although the breakup of "Ma
Bell" may be debatable, the benefits of
enhanced competition in communications
have been obvious for more than a
decade. In the financial sector the out-
break of competition has been nothing
short of phenomenal. [Treasury Secre-
tary] Don Regan was a leader in the
effort from his perch as head of Merrill
Lynch. Even now, the spread of competi-
tion in the financial sector is being
pushed by the private sector despite
resistance by certain government
agencies.

If we can make this kind of progress
in the United States, there is hope on
the international front. There can be no
doubt that a more competitive interna-
tional market for agricultural products
will benefit the American farmer and
American agriculture. I said a moment
ago that farmers have been the backbone
of the free trade philosophy in the
United States. We need the backing of
the farm sector today more than ever.
Let us hear from vou. ■

Examining the
Unitary Tax

by W. Allen Wallis

Address before the Chamber of Com-
merce in Coral Gables on March 8, 198k.
Mr. Wallis is Under Secretary for
Economic Affairs.

Genesis of the Problem

Unitary taxation originated at the turn of
the century from the difficulties states
had in taxing railro ids. The problem was
how to tax the income of the first truly
multijurisdictional corporate entities.
Gross receipts within the state? Assets?
And if assets, where should the railroad's

Department of State Bulletin

ECONOMICS

rolling stock be taxed? In the state of in-
corporation or in the states in which it
was used?

The states simply taxed as much as
they could get away with, until the
Supreme Court, recognizing the potential
for double taxation, held that the income
should be apportioned "fairly" among the
states. What "fairly" meant was left up to
the states. The states came up with
various formulas and eventually extended
them to all taxpayers doing business in
more than one jurisdiction.

On a domestic basis, many states
adopted what is known as unitary taxa-
tion. They treat as a unit all the business
that is done under one ownership, then
estimate what proportion of that income
was earned in the state and apply the
state tax to that income. The proportion
of the unit's income earned in the state
usually is estimated from the proportions
of its sales, assets, and employment in the
state.

Why is the Department of State in-
terested in state taxes? The answer lies in
the growth and integration of the interna-
tional economy and America's increasing
take in it. Just as individual states have
melded into one gigantic "free-trade
area," so the nations of the world have
oecome, since the Second World War, an
ntegrated trading area.

The dramatic expansion of the world
economy following the Second World War
was fed by strong flows of goods and
private investment among nations. As
capital markets became truly interna-
tional, investors in the United States
could seek opportunities in Europe, Latin
America, or virtually anywhere in the
world. The same has been true for foreign
investors looking for a stable business
climate and a high rate of return, both of
which they found in the United States.
U.S. direct investment abroad as of 1982
totaled some $221 billion while foreign
direct investment in the United States in
the same year stood at $102 billion.

State tax administrators faced new
problems, as a result, in accurately
ssessing the income of corporations do-
ing business within their jurisdictions.
Some would say that tax authorities also
saw this as a new opportunity. Either
way, a number of states sought to "inter-
nationalize" the unitary tax practice they
had developed originally for the railroads
to address two perceived difficulties with
intracorporate accounting for income
earned in different countries.

First, they worried about the ability
Df multinational corporations to shift in-
come out of the country to avoid taxation
Dr to earn so-called "synergistic" or "no-

where" income, meaning earnings not at-
tributable to any jurisdiction and which
would, they alleged, escape taxation alto-
gether.

Second, they argued that the states
did not have the administrative resources
to audit the international transactions
effectively using the so-called "arm's
length" approach to intracorporate
transactions. Recently, the Supreme
Court had ruled in their favor, holding
that the unit whose income is apportioned
to the state may be worldwide income and
need not be confined to income earned in
the United States.

The state's first concern is probably
not serious. There are only a few corpora-
tions so highly integrated that they can
take advantage of tax differentials that
lead tax authorities to assume that all
multinationals can practice such tax
avoidance schemes. Nevertheless, unitary
taxation was applied to all corporations
working internationally in order to
restrain those few that were actually
avoiding taxes to any appreciable extent.

The vast majority of international
businesses are organized around profit
centers without which they could not
determine effectively their rates of return
in different countries. The term "multina-
tional corporation" obscures the fact that
these are separate companies related by
ownership but whose managers are
responsible for generating earnings
within their individual markets. Earnings
of individual profit centers reflect fairly
accurately the amount generated within
various jurisdictions. That notion is the
basis for the separate accounting or
"arm's length" method of taxation which
is used by the Federal Government, by
the vast majority of the states, and by
other nations. The principle of "arm's
length" taxation is embodied in an OECD
[Organization for Economic Cooperation
and Development] convention to which
the United States adheres.

The notion of accurately reflecting in-
come and corporate organization also
bears on the states' second concern: ad-
ministrative convenience. Some seem to
assume that that administrative pain of a
tax system can be measured by adding up
the number of keystrokes on an auditor's
calculator. That ignores what every tax
expert will tell you is the foundation of
any good tax system: compliance. When
taxpayers believe that the system of taxa-
tion does not fairly reflect the income
they have earned, they will not comply.
When they do not comply, the public
loses both the costs of attempting enforce-
ment and the revenue lost from non-
compliance. You will recall that this coun-
try declared its independence because of
taxes regarded as unfair.

International Implications

The Boston Tea Party was vividly re-
called to the Secretary of the Treasury
Don Regan recently. Peter Welch, British
chairman of the Unitary Tax Campaign,
sent Secretary Regan a box of fine tea in
a pointed contrast between the colonists'
actions and the British reaction to the
unitary tax. Small wonder that the
British are concerned. They are the
largest foreign direct investors in the
United States, having investments of
$23.3 billion as of 1982.

They are by no means alone in their
objections. Use of the unitary tax— first in
California, now spread to 12 states— has
become a major irritant in our relations
with all our major trading partners. Dur-
ing my tenure at the State Department,
this issue has provoked an extensive and
intensive reaction from foreign nations.
Indeed, it may rank with the most con-
troversial issues I have handled in the
economic area. Let me give you an exam-
ple. You know how difficult it is to get 14
people to agree on anything, much less 14
nations. But it happened. To express
their concern over unitary taxation, 14
countries (the 10 members of the Euro-
pean Community plus Japan, Canada,
Switzerland, and Australia) representing
$85 billion or 84% of total foreign direct
investment in the United States, submit-
ted a joint diplomatic communication to
the Department of State. They have three
complaints.

First, they argue that the application
of the unitary tax to worldwide earnings
of their corporations inevitably results in
double taxation. Even supporters of the
unitary tax acknowledge its potential for
double taxation.

Second, they point out the adminis-
trative burden of compliance. The unitary
tax requires that foreign firms create an
additional set of books according to
American accounting standards.
Moreover, there are severe problems of
valuation. For instance, should the tax in-
cidence of a French corporation depend
solely on the current conversion rate of
the franc? If so, on which day? You may
have noticed that exchange rates have
shown considerable movement in recent
years. How should a German vintner
calculate the historical cost of a vineyard
it purchased centuries ago? The unitary
tax may raise as many vexing questions
as it resolves.

Our friends point out that unitary tax-
ation deviates not only from the practice
of a majority of states and the Federal
Government but also from internationally
accepted principles on which international
investment depends. They question U.S.
arguments for a more open international

EUROPE

investment climate when their firms face
this kind of tax treatment in the United
States.

Their third point underscores a poten-
tial problem of as great concern to us as
to them. We must anticipate adoption of
unitary taxation by developing nations
who are looking desperately for new
sources of revenue. These governments
are heavily in debt and vastly overcom-
mitted for domestic programs, many of
them ill advised. They are seeking
revenue from any source to service their
debts and fund their development pro-
grams. As the world's largest foreign
direct investor, the United States will be
a big loser if unitary taxation becomes
widespread. The developing nations
would be even bigger losers because they
would lose investments.

Implications for the States

It is easy to understand the attraction of
unitary taxation to the states and their
reluctance to give it up. Every state
would like to find a new source of
revenue. Last year, less than 3 weeks
after the decision of the Supreme Court
upholding California's use of the unitary
method on a worldwide basis, the Florida
State legislature enacted its own version
of the unitary tax. One State Senator was
heard to exclaim: "It was like finding
money on the street, and we grabbed it,"
And the Director of Economic Develop-
ment thought at the time that the new-
law would not seriously hurt the state's
image among investors. Moreover, within
reasonable bounds, no one questions the
states' right to tax as they see fit. Presi-
dent Reagan, himself once Governor of
California, is one of the staunchest
defenders of that principle.

But some are beginning to ask: at
what cost? I wonder if your Director of
Economic Development and the state
legislature were as confident of the
state's business future after a delega-
tion of British investors canceled their
planned trip to Florida in response to the
passage of the unitary tax. Will they feel
as confident if the British Parliament
enacts a law to retaliate against Florida
firms doing business in the United
Kingdom7

Some in Florida certainly are taking
seriously the hazards of the unitary tax.
A blue ribbon panel set up by Governor
Graham of Florida has recommended the
repeal of the unitary tax. Other
states— competing for those investment
dollars that mean employment and
economic growth— are taking it seriously,
too. Recently, Governor Orr of Indiana
was so concerned that his state might be

misrepresented as a "unitary state" that
he issued a widely disseminated public
statement clarifying Indiana's tax policy
to avoid that impression. It may well be
that competition among the states will
restrain use of the unitary method.

A Potential Solution

The President, in October 1983, formed a
working group on unitary taxation under
the chairmanship of Treasury Secretary
Regan. (I am the only other member of
the Federal Government who is a
member of the group.) Recognizing both
the complaints of our foreign trading
partners and the legitimate rights of the
states, the President brought together
representatives of the states, the
business community, and the Federal
Government to discuss the issue and
possible alternatives to the current prac-

tice of the 12 states that now use
worldwide unitary taxation.

The working group eschewed the
possibility of a federally mandated solu-
tion. In the spirit of federalism, we are
seeking a solution which could be im-
plemented by the states voluntarily. Our
staff-level task force has been hard at the
task of developing options for presenta-
tion to the working group and Secretary
Regan. While it would be premature to
discuss the potential alternatives at this
time, I can say that I am cautiously op-
timistic that the working group can find a
compromise that meets the needs of the
states and minimizes the irritant that
unitary tax has become in our foreign eco-
nomic relations. If we don't, both the
states individually and the country as a
whole will find important objectives
derailed. ■

The Atlantic Alliance and

the American National Interest

by Jeane J. Kirkpatrick

Address before the National Commit-
tee on American Foreign Policy in New
York City on April 30, 1984. Am-
bassador Kirkpatrick is U.S. Permanent
Representative to the United Nations.

There is a widespread, growing sense on
both sides of the Atlantic that we have
come once again to one of those periodic
times of decision: will we continue as we
are, working in and through the existing
framework, or is it time for new depar-
tures? Articles on the "crisis" of the
alliance have become a staple of editorial
pages in the United States and in Europe.
In the European press, these articles
often criticize U.S. policies and question
whether our policies and our rhetoric do
not make the world a more dangerous
place— for Europeans. In the United
States, European shortcomings are less
emphasized than questions about whether
it makes any sense at all for the United
States to go on investing so many people
and so much money in the NATO enter-
prise.

Not all issues that are hotly discussed
in the media and on debating platforms
make their way onto legislative calendars.
Some simply die. But widespread public
interest in an important subject, if not
necessarily a harbinger of official changes

to come, at least gives notice of that
possibility.

The relationship of the United States
and Europe is an example of an issue in
which there is informal, unofficial discus-
sion and little or no formal or official ac-
tion. I should like to emphasize that there
is now no discussion in the U.S. Govern-
ment of restructuring NATO, withdraw-
ing American troops, or changing Ameri-
can strategic doctrine. Certainly no such
discussion occurs at authoritative levels.
Nonetheless, the discussion persists and
spreads, the op-ed pieces multiply, and
more and more influential persons join
the dialogue. Have we reached a point
like that about which John Quincy Adams
said: "I do not recollect any change in
policy, but there has been a great change
in circumstances"?

How important are the changed cir-
cumstances which confront the Atlantic
alliance 35 years after its founding? How
basic? How threatening or liberating? Is
this relationship among the nations of the
Atlantic alliance still necessary and, if so,
to whom and for what?

Departure From Traditional
U.S. Attitudes

Certain facts— known to persons pres-
ent—need, nonetheless, to be mentioned
to set the questions and discussion in con-
text. First, the fact that, from the U.S.

Department of State Bulletin

perspective, the alliance represented a
sharp departure from traditional U.S. at-
titudes and behavior. In his memoirs,
President Harry Truman wrote:

On April 4. 1949, I stood by Secretary of
State Dean Acheson as he signed his name, on
behalf of the United States, to a treaty which
was the first peacetime military alliance con-
cluded by the United States since the adoption
of the Constitution.

Signing the North Atlantic Treaty
was, as Truman noted, "one more step in
the evolution of U.S. foreign policy, along
with the United Nations Charter, the
Greek-Turkish Aid Program, and the
Marshall Plan." It was also a specific vio-
lation of the nation's traditional policy of
refusing permanent alliances.

Americans had never been comfor-
table with the notion that our fate is
bound up with the fate of foreign powers.
As everyone who is familiar with Ameri-
can history is aware, the Founding
Fathers of the United States took pains
not to become drawn into what they con-
sidered the net of European entangle-
ments, rivalries, and power politics. This
view is, of course, summarized in George
Washington's warning of September
1796:

Europe has a set of primary interests
which to us have no, or a very remote relation,
hence she must be engaged in frequent contro-
versies the causes of which are centrally
foreign to our concern.

This policy of noninvolvement in
European politics was supplemented in
1823 by another famous American decla-
ration which also distinguished our inter-
ests from those of Europe's. The Monroe
Doctrine extended the protection of the
young United States beyond its continen-
tal limits for the first time to the whole of
the Western Hemisphere and declared
that, at the risk of war, the United States
would thereafter resist the creation of
new European empires in the Western
Hemisphere. This step was not prompted
by a desire to become involved in interna-
tional diplomacy. To the contrary, it was
seen as a prudent measure which would
ij protect the United States and the other
American republics against the rivalries
■ and conflicts characteristic of European
, politics of the era, including, of course,
| the politics of Russia. These attitudes per-
jsisted past World War II.

The identification of our security with
I countries beyond our borders, beyond the
I Atlantic, remained unsettling to Ameri-
ji cans. The comments of the late Senator
Robert A. Taft of Ohio, who warned
against ratification of the North Atlantic
Treaty, manifested these traditional
American concerns. Addressing the U.S.
'iSenate in 1949, Taft said:

By executing a treaty of this kind, we put
ourselves at the mercy of the foreign policies
of 11 other nations, and do so for a period of 20
years. . . . The Monroe Doctrine left us free to
determine the merits of each dispute which
might arise and to judge the justice and the
wisdom of war in the light of the circum-
stances at the time. The present treaty
obligates us to go to war if certain facts occur.

Although there was a growing sense
of global interdependence in the postwar
United States, we still approached inter-
national commitments with caution and
only with the expectation that they would
be temporary in duration. The founding
fathers of the alliance did not intend to
establish a permanent security system.
Rather, they hoped to allow the war-
weakened democracies of Western
Europe a security framework within
which they could take refuge from Soviet
threats and subversion until, with mas-
sive American aid, they repaired their
devastated economies and rebuilt their
defenses, thereby impairing the Soviet's
ability to challenge their security.

Response to the Soviet Threat

The second point I desire to emphasize is
again well known; yet more and more
often its importance is underestimated
with the passage of time. It is that the
alliance was forged as a direct response to
the actual, imminent danger to Western
Europe of Soviet subversion and aggres-
sion. No amount of historical revisionism
can explain away facts of Soviet expan-
sion into Europe. Truman described these
to the Congress in a speech to a joint ses-
sion on March 17, 1948:

Since the close of the hostilities, the Soviet
Union and its agents have destroyed the inde-
pendence and democratic character of a whole
series of nations in eastern and central
Europe.

It is this ruthless course of action, and the
clear design to extend it to the remaining free
nations of Europe, that have brought about
the critical situation in Europe today.

The tragic death of the Republic of Czecho-
slovakia has sent a shock throughout the
civilized world. Now pressure is being brought
to bear on Finland, to the hazard of the entire
Scandinavian peninsula. Greece is under direct
military attack from rebels actively supported
by her Communist-dominated neighbors. In
Italy, a determined and aggressive effort is be-
ing made by a Communist minority to take
control of that country. The methods vary, but
the pattern is all too clear.

The ensuing decades of European
peace, stability, and economic develop-
ment have so transformed the security
and well-being of Europe that it is easy to
forget the reality of destabOization, in-
timidation, and outright aggression in the
late 1940s. The Soviet threat to which the

EUROPE

alliance was a response constituted a
large part of the "Red Scare" of the
times. Events in Poland, Hungary,
Finland, and Czechoslovakia dramatized
the character as well as the reality of the
danger confronting Greece and Italy and
the prospects for democracies in Europe.

Perception of Repeated Crises

The third point that I desire to
underscore is that despite, or perhaps
because of, its duration and patent suc-
cess, the alliance has repeatedly, even
chronically, been perceived as undergoing
some sort of crisis which threatened to
transform if not destroy it.

We err if we think that the alliance,
having once enjoyed a golden age of
nearly uniform judgments on all things
important, has now lapsed into a progres-
sively problematic relationship. In his
Fire in the Ashes, published in 1953,
Theodore White wrote of the passing of a
period marked by great closeness and
constructive cooperation and the entry in-
to a period of new problems and new mis-
understandings that challenge whether
we can deal with these misunderstand-
ings at all.

The same sense that the solutions to
the problems of the postwar Soviet threat
to Europe were being overtaken by
events was expressed by Arthur Schles-
inger's comments in The Kennedy Years:

By 1960 the economic dependence on the
United States had largely disappeared.
Western Europe had been growing twice as
fast as America for a decade; it had been draw-
ing gold reserves from America; it had been
outproducing America in coal. Americans were
flocking across the Atlantic to learn the
secrets of the economic miracle. And, at the
same time, the military dependence had taken
new and perplexing forms. If the prospect of a
Soviet invasion of Western Europe had ever
been real, few Europeans believed it any
longer. Moreover, the Soviet nuclear achieve-
ment, putting the United States for the first
time in its history under the threat of devas-
tating attack, had devalued the American
deterrent in European eyes. These develop-
ments meant that the conditions which had
given rise to the Marshal] Plan and NATO
were substantially gone. The new Europe
would not be content to remain an economic or
military satellite of America. The problem now
was to work out the next phase in the A tlantic
relationship.

Hans Morgenthau expressed the same
concern that basic premises and charac-
teristics of the alliance could not remain
unchanged in a rapidly changing world.
He wrote in 1962:

NATO was created as, and is still today of-
ficially considered to be, the shield that pro-
tects Western Europe from a Soviet attack on
land. Yet it has never been clear how NATO

July 1984

EUROPE

could perform that function with the forces
actually at its disposal or how it could have
performed that function even with the much
larger forces which its official spokesmen from
time to time declared to be indispensable. Nor
has it been clear how such a military organiza-
tion, top-heavy as it is with collective agencies
for the making of decisions, would operate ef-
fectively in case of war.

These are some of the doubts which arise
from within NATO itself. There are others
which concern the relations between NATO
and the overall political and military purposes
of the Western alliance and, more particularly,
of the United States. What is the place of
NATO within the overall military strategy of
the United States? What functions could
NATO perform for the European communities
and a more closely integrated Atlantic com-
munity? What impact is the impending diffu-
sion of nuclear weapons likely to have upon the
policies and the very existence of NATO? And
what of the probable replacement of the
manned bomber and bases supporting it by
long-distance missiles? These are some of the
questions which the Western governments
should have raised long ago and answered.

That was 22 years ago. Today the
search for definitive answers to those
questions and others continues. Henry
Kissinger has recently advised us that the
problems facing the alliance today may re-
quire "a remedy that is fundametal, even
radical." He suggests that the time may
have arrived for Europe to assume the re-
sponsibility for its own defense against
conventional attack, time to draw down
or withdraw entirely the 300,000 U.S.
troops in Germany. Recently, James
Schlesinger and Helmut Schmidt had a
widely reported public dialogue in which
they, too, questioned the validity of using
long-established NATO security arrange-
ments to face the challenges of today.
And perhaps the most basic question of
all has been raised by La Stampa's Ar-
rigo Levi: "Can one generation's experi-
ences be bequeathed to the next?"

The fact is that there has never been
a time in the 35-year life of NATO when
everyone has been entirely satisfied with
its performance. We have disagreed as to
the nature of the Soviet threat and an-
guished over how to deal with it. We have
disagreed about policies outside the area
of the alliance. Diversity of the interests
and views of the members in matters out-
side the treaty area has resulted in some
dramatic conflicts inside the alliance. It
is hard to remember, retrospectively, the
passion associated with the Suez crisis of
1956, with European decolonization, and
with France's withdrawal from NATO in
1966. Yet even a casual review of alliance
history reveals disagreements so frequent
and so widespread that they have some-
times obscured the fact that we have con-
tinued to share a general sense of the
reality of a potential Soviet threat to the

security of Western Europe and a belief
that the Atlantic alliance is the best
available option for protection from that
threat. The permanence of the debate is
instructive. It compels us to examine the
reasons for the longevity of the alliance in
defiance of the doubts and challenges that
have plagued it and the chronic problems
of divisive democracies trying in peace-
time to make and maintain common
policies with regard to a potential military
threat.

Flexibility and Strain

The problems are to a significant degree a
consequence and a reflection of its suc-
cess. The persistence of the alliance over
the three-and-one-half decades demon-
strates that it is a much more flexible in-
strument than it is usually conceived as
being. Established as a framework for the
participation of the United States in the
defense of Europe, it has been a colossal
success. Many things have changed since
1949. But most important is the reality of
two generations of peace and prosperity
in Western Europe, which has not. The
relative cohesion among European states
that have fought one another for centu-
ries is, itself, a remarkable occurrence. Its
effect on the security and stability of
Europe is also remarkable. There has not
even been a significant European
centered East- West confrontation since
the last Berlin crisis in 1962. And within
this relative stability, the economies and
cultures of all alliance members have
flourished.

Indeed, European stability has been
so uninterrupted it now seems unremark-
able and is frequently viewed with indif-
ference. A decade ago, the late Raymond
Aron labeled this development "the rou-
tinization of the Atlantic Alliance," by
which he meant that the alliance ". . . no
longer arouses enthusiasm or hostility."
Aron suggested that while "we may im-
agine a system that is better, we cannot
dismiss as of marginal importance
NATO's protection of Western European
security against Soviet attack and subver-
sion. Whatever the feasible alternatives
to Atlantic security arrangements are,
there is no evidence that they could hope
to fulfill their basic purposes as succes-
fully as the current arrangement has
done."

However, it is never clear that what
is will continue to be or even that what is
successful will survive. It is not necessary
to be a Hegelian or a Marxist to be im-
pressed with the tendency of solutions to
become problems, requiring new solu-
tions. Obviously, there are strains within
the alliance. Some of these are deeply
rooted.

■■

The United States and its partners
share certain characteristics of democra-
cies that create problems for maintaining
permanent military alliances. The dynam-
ics of electoral politics predispose
democracies to focus on short-range prob-
lems and short-range solutions. Moreover,
democracies, reflecting as they do the
concerns of ordinary citizens, are in their
very nature predisposed to seek and to
expect peace, not war; to resent military
expenditures; and to evade long-range
planning. The very fact of four decades of
peace in Europe makes the need for main-
taining the alliance less plausible.

There are also the geopolitical real-
ities, in which the American tradition of
isolationism and universalism are alike
based. "An island continent," Walter
Lippmann called us, "separated by two
oceans from Europe and Asia, separated, I
too, by history and demography: Most
Americans came here seeking relief from
their former conditions and are in some
sense ambivalent about permanent involvi
ment in the affairs of other nations."
Geographic realities give the Western
Hemisphere irreducible importance to
America, and the westward course of
American destiny links us to the Pacific
states. We cannot transcend nor ignore
these realities.

My good friend Larry Eagleburger
[former Under Secretary of State for
Political Affairs], whose departure from
public service impoverishes us all,
recently predicted what he perceived as
"the shift of the center of gravity of U.S.
foreign policy from the transatlantic
relationship toward the Pacific Basin and
particularly Japan." Besides the growing
importance of Pacific states in the world
economy, he cites the Europeans having
"become so concerned with their own
problems that it has tended to make it
ever more difficult to get Western
Europe to look outside its borders" as tin
reason underlying this perceived shift.

Certainly, the U.S. involvement with
the nations of the Pacific is longstanding. ,
We have been going west throughout our
history. Our trade with that region has
surpassed that with Europe and is grow-
ing at a faster rate.

There is also the special relationship
with our hemisphere and the other na-
tions of the Americas. Geography, demog
raphy, and history alike link our security
and destiny with the Americas.

Beyond geography, there is, of
course, history and identity. The United
States has historical and demographic ties
to the Pacific, Africa, and Latin America
but strongest historical and demographic
ties to Europe.

Indeed, one could say that the Atlan-
tic community is as old as the European
discovery of America. We are part of
what is called Western civilization. That
jreco-Roman, Judeo-Christian approach
;o life defines us just as surely as it
iefines Europe. We are the heirs of the
iberal democratic tradition born of the
jfforts of Englishmen and other Euro-
jeans to make just government depen-
dent on the consent of the governed. To
>e an American means to be part of that
:ivilization. It does not mean that we are
European. It does not mean we are Euro-
entric. But we share a civilization with
Europe, a heritage, an identity that
Iefines our destiny at the same time it
inks our destiny to Europe. This sense of
dentification reinforced those who sought
uccessfully to involve the United States
n World Wars I and II. And there are less
eadily categorized ways in which our na-
ional interest links us to Europe.

Hans Morgenthau, writing in 1951,
?xplained how U.S. national interests led
is to participate in the politics of the Old
World.

Since a threat to our national interest in
he Western Hemisphere can only come from
utside it— historically from Europe— we have
.lways striven to prevent the development of
onditions in Europe which would be conduc-
ve to a European nation's interfering in the
ffairs of the Western Hemisphere or eontem-
lating a direct attack upon the United States.
1hese conditions would be most likely to arise
a European nation, its predominance unchal-
?nged within Europe, could look across the
ea for conquest without fear of being menaced
t the center of its power; that is, in Europe
tself.

It is for that reason that the United States
as consistently pursued policies aiming at the
; laintenance of the balance of power in
Europe. It has opposed whatever European
ation— be it Great Britain, France, Germany,
r Russia— was likely to gain ascendancy over
,s European competitors which would have
?opardized the hemispheric predominance and
ventually the very independence of the
Inited States. Conversely, it has supported
whatever European nation appeared capable
f restoring the balance of power by offering
uccessful resistance to the would-be con-

A balance of power? A would-be con-
[ueror? Revisionists affirm these con-
erns were ever illusory and join a larger
horus of voices that question their con-
emporary realism.

lealities and Expectations

Two questions, each important, must be
iddressed. One concerns reality. Does the
?oviet threat to the peace, national inde-
)endence, and freedom of Western
Curope, which stimulated NATO's forma-

•i

tion, still exist? The answer seems to me
to be found in the sponsorship by the
Soviet Union of subversion, coups, insur-
gency, invasion, incorporation in other
continents, and the new unilateral vulner-
abilities created for Western Europe by
Soviet deployment of new generations of
missiles targeted on Western Europe. Le
Monde last week commented in an
editorial on "le style Tchernenko."

The observers who have been wondering if
the new Soviet leadership installed last
February would harden the policy followed
previously have now new evidence. Events of
the last days in Afghanistan confirm the warn-
ings of the leaders of Afghanistan's resistance:
Moscow has mounted a new form of combat
much more massive and brutal, devoid of any
of the subtleties which Andropov demon-
strated.

Afghanistan is not Europe. The rulers
of the Soviet Union are capable of differ-
entiated response. But their continued
boycott of the INF [intermediate-range
nuclear forces] talks, the demand for
superiority present in the adamant insist-
ence on removal of Euromissiles, seems to
underscore many other indications that
Soviet hegemony over Western Europe
remains a realistic concern. The most
powerful argument for the persistence of
the alliance is the persistence of the
threat of peace, national independence,
and freedom which stimulated its forma-
tion in the first place, a threat symbolized
today in the in the SS-20s and their
various cousins.

Freedom from fear is not tantamount
to freedom from danger, Lawrence Mar-
tin has reminded us, adding:

It is the difficult task of Western
strategists ... to preserve the real safety of
their nations in an environment of conflict
which the nations would rather ignore and a
price in money, and in blood, which the peoples
would, quite reasonably, rather not pay.

Between threat and threat perception
lies the whole subjective world with its
well-known possibilities for deceit, exag-
geration, hopes, fears, and illusions con-
cerning both self and others. There lies,
too, the domain of value and choice.

The objective persistence or threat
does not guarantee the persistence of its
perception and constant perception does
not guarantee constant response.

The Europe of the late 1940s was vul-
nerable and felt vulnerable. The recent
experience with conquest and depotism
had left a clear, deeply felt, widely held
sense of the superiority of freedom, the
horror of subjection. The United States
of the late 1940s enjoyed clear military
and economic superiority and, felt the
confidence, community and purpose born
of victory over tyrants. The confidence

EUROPE

was so strong that, to this day, no revi-
sionists have arisen seriously to question
whether World War II was a necessary
war, whether the stakes were as high as
then perceived, whether the devastation
of war was justified at all.

In neither Europe nor America is
there today quite the same clarity and
confidence about the choices and stakes:
about the problem to which the alliance is
the solution or about the solution.

At the most radical level, some Euro-
peans doubt today the moral difference

18th Report on Cyprus

MESSAGE TO THE CONGRESS,
APR. 17, 19841

In accordance with Public Law 95-384, 1 am
submitting herewith a bimonthly report on
progress toward a negotiated settlement of the
Cyprus question.

Since my 1st report to you of January 24,
1984, President Kyprianou met with the U.N.
Secretary General in Paris on February 4.
Shortly thereafter, State Department
Counselor Edward Derwinski and Special
Cyprus Coordinator Richard Haass paid
separate visits to the region to discuss
developments with the governments of
Greece, Turkey and Cyprus and to urge their
cooperation with the Secretary General. In
March, Turkish Cypriot community leader
Denktash visited New York for discussions
with the Secretary General and with Messrs.
Derwinski and Haass. Also in March, Cypriot
Foreign Minister Iacovou met with both the
Secretary General and with Secretary Shultz.

These meetings have been held to discuss
the proposal made by the two sides in early
January, as described in my previous report,
and to support the efforts of the Secretary
General to promote negotiations between them
in accordance with his Security Council
mandate.

We are pleased to report at this time that
the Committee on Missing Persons has met
and agreed on the procedure it will follow at
future meetings. We expect the committee to
begin its first working session shortly.

We are encouraged by the Secretary
General's active involvement in seeking com-
mon ground for progress, and we continue to
offer him our support. We are hoping for pos-
itive results from this intensive diplomatic
activity.

Sincerely,

RONALD REAGAN

■ July 1984

•Identical letters addressed to Thomas P.
O'Neill, Jr., Speaker of the House of Repre-
sentatives, and Charles H. Percy, chairman of
the Senate Foreign Relations Committee (text
from Weekly Compilation of Presidential Doc-
uments of Apr. 23, 1984). ■

EUROPE

between "the superpowers." John
Vinocur wrote in yesterday's New York
Times Magazine of certain German intel-
lectuals who speak of "America as ag-
gressor; America as polluter, nuclear ter-
rorist and profiteer; America as-the-force-
keeping-us-from-the-way-we-want-to-be."
(Of course, he also described in the same
piece, the dramatic turnaround with re-
gard to the United States of French intel-
lectuals.)

The transformations of time have
dimmed old visions, eroded old ties, and
created at the same time new possibil-
ities. The rulers of East Germany have
reinforced the wall but also seem to have
understood that the personal ties among
Germans lead not to satiation but to the
desire for more. The longing to break bar-
riers between the Germanies reinforces
the fear of nuclear war in this front-line
state, creating a state of mind called
neutralism— much as the sense of unnec-
essary vulnerability and unappreciated
solidarity feeds American isolationist im-
pulses.

Accompanying these ongoing mutual
reevaluations of moral and political
character, strategy, and tactics are also
widely discussed. Should Europe risk
becoming a battlefield in a war between
superpowers? Should Americans continue
to expose themselves to nuclear war to
protect Western Europe?

The evidence suggests that in no
country of Western Europe a majority
holds that their interests would be better
served outside of the NATO security
guarantee. On the contrary, I believe that
in many cases media coverage of con-
structive debates over the relative merits
of NATO defense modifications has mag-
nified radical perceptions and prescrip-
tions. When the die was cast, Europeans
and Americans alike decided the issue of
deployment in favor of an allied response
to a new European vulnerability.

Some Europeans like to believe that
the American stake in Western Europe is
so great that the United States necessarily be
involved in an attack on a NATO nation.

Some Americans, thinking radically,
doubt that this is necessarily the case-
providing we had neither troops nor
missiles in Europe. Some Americans in-
sist that European and American defense
is divisible.

It is as tempting and mistaken to ex-
aggerate distrust, dislocation in
U.S. -European relations as it is to ignore
them.

Dissatisfaction with the alliance's tac-
tics, plans, and structures surely is rooted
in changing economic and military facts
and relations which must be continually
updated.

But much of the current "crisis mon-
gering" is surely rooted less in changed
objective realities than in changed expec-
tations. We have overloaded the alliance
with expectations which it was never in-
tended to bear; then, because it does not
meet these new expectations, we are sur-
prised and view this instrument as defi-
cient. The image of frictionless relations
between allies is almost exactly analogous
to the image of the frictionless marriage
or the perfectly ordered house. These ex-
ist only in fantasy. The fact is that the
relations between the United States and
its NATO allies today are very good and
very strong. They are based on common
values, deeply related common in-
stitutions and legal systems, and a very
great deal of mutual respect on the part
of most significant figures in all of the
societies— not just governments but
societies.

The debate over the alliance security
strategies was not begun with the instal-
lation of Soviet SS-20s. It will not end
when deployment of INF is completed.
For many the idea that the United States
would consider an attack upon Western
Europe as an attack upon itself has
always seemed hard to accept. We would
hope that for now the absence of any
authoritative discussion of reducing the
level of U.S. troop strength in Europe,
the rejection of proposals to renounce
first-use of nuclear weapons in Europe,
the improvement of theater nuclear de-
fenses, and, of course, the continued ex-
pressions of unshakeable support from
Washington for U.S. commitments to
European security would allow European
fears to subside. But questions will and,
of course, should continue. And new
developments will require new modifica-
tions. The emergence of chemical
weapons promises to raise new questions
about the nuclear threshold to illuminate
Europe's commitment to a nuclear de-
fense, to illuminate, as well, U.S vulner-
abilities deriving from any strategy that
foresees "going nuclear" as an early
response.

Doubtless, too, there will be new
demands for and against restructuring de-
cisionmaking within the alliance. Italian
Foreign Minister Colombo suggested in a
recent speech a new "Euro-American
friendship pact, and also periodic meet-
ings between foreign ministers to coordi-
nate their respective views . . ." and pro-
vide continuity in discussions among
NATO governments.

The instrumentalities necessary for
adaptation to changing realities exist.
Power in the alliance is shared, as
former German Chancellor Helmut
Schmidt noted 2 years ago during the con-
troversy over NATO modifications:

". . . the voice of the Europeans is strong
enough to be heard if they so desire.
There are fifteen members in the
Alliance, thirteen of which are Euro-
peans. Why don't they speak if they want
to be heard?"

They do want to be heard. They do
speak. The NATO system can and will
respond.

Doubtless, too, there will be U.S.
frustrations with the alliance which will
doubtless persist. In the U.S. Govern-
ment, we chafe today over European
failure to understand an emphasis with
our problems outside Europe. Larry
Eagleburger, a staunch and warm sup-
porter of the alliance, expressed his disap-
pointment that, in a year after the
Falklands, the Europeans could not re-
strain harsh criticism over the Grenada
landing in which we moved in careful con-
cert with the nations of the Carribean:
"At the very least could not our friends
have suspended judgment until the
emerging situation became clearer?"

It is not a perfect marriage; no
counselor can make it one. We have and
will continue to have distinct interests
and shared ones as well. "Who profits
most from the Alliance— Europe or
America?" Aron asked a decade ago.

The fact that the question was not
easily answered then and is not easily
answered today illuminates the founda-
tions of the alliance. This pattern of co-
operation and alliance among the nations
of the Atlantic area will survive genera-
tional change because it is bound on more
than nostalgia. It will survive new impor-
tant economic ties to the Pacific because
it is bound together by more than shared
economic interests. It will survive disap-
pointments and misunderstandings
because the leaders of the democracies
understand, finally, that all our nations,
and all their freedoms, depend finally but
immediately on the civilization that sus-
tains us all.

There is no perfect alliance. There are
no perfect friends, and as James Reston
commented concerning this debate on
NATO defense improvements: "There is
no perfect security. There is only the
struggle. With friends at our side doing
the best we can."

The American Government and the
people it serves have every intention of
continuing that struggle, side-by-side
with our European friends. ■

;

Department of State Bulletin

Situation in
Cyprus

PRESIDENTS STATEMENT,

MAY 8, 19841

\t the end of this month I will meet
vith the Foreign Ministers of all the
^JATO countries to mark the 35th an-
liversary of NATO's founding. The
illiance is sound. But continuing
iisagreements between two vital
nembers of the alliance, Greece and
Turkey, are of great concern. Because
tur friendship with each country is so
mportant, and because their need for
me another is so great, special efforts
nust be made to reduce disagreements
nd promote harmony — particularly on
he island of Cyprus, which has become
focal point of tension.

Successive Administrations have
ried unsuccessfully to solve the painful
ispute which has divided Cyprus into
eparate Greek and Turkish com-
lunities. Over the last several years the
ecretary General of the United Nations
as worked painstakingly to keep the
arties talking to one another. In
lovember, after the Turkish Cypriot
eclaration of independence, the United
tates condemned the action and called
ar its reversal, while also working to
ncourage the parties to move forward
1 making real progress. On January 2,
le Turkish Cypriots responded by pro-
osing a series of good will measures,
ffering among other things to turn over
art of the coastal city of Varosha to the
Fnited Nations for eventual Greek set-
ement. A few days later the Govern-
ment of Cyprus proposed new guidelines
or a comprehensive settlement. Turkey
self announced the removal of 1,500
•oops from northern Cyprus. And the
ecretary General of the United States
'as preparing to meet with the parties
3 discuss his own plan. We welcomed
lese developments as positive steps,
lovement was at last occurring.

At this point, less than 2 months
go, Secretary Shultz wrote leaders of
le Congress to caution that cuts in the
'urkish assistance program could risk
ndangering the progress. Unfortunate-
/, important NATO-related funding for
'urkey was nonetheless cut in commit-
ee, no doubt in the mistaken hope that
nis would somehow stimulate progress
n Cyprus. As a result, diplomatic ef-
Drts quickly ground to a halt.

We are now working to get
iplomacy back on track. We have

e) uly 1984

assured UN Secretary General Perez de
Cuellar of our continuing support for his
efforts to bridge the gaps between the
Greek and Turkish communities of
Cyprus.

I understand the frustration in the
Congress and elsewhere about the need
for progress. Indeed, I believe the time
has come to try a new and more positive
approach. Rather than punishing
Turkey, let us focus constructive energy
on ways of encouraging the parties on
Cyprus itself— for it is here, ultimately,
that differences must be resolved.

The Administration and the Con-
gress need to work together to re-create
conditions conducive to successful
diplomacy. We ask the Congress to work
with us by supporting my request for
security assistance for our Greek and
Turkish allies and by removing punitive
conditions on that assistance. In return,
I am prepared to work with the Con-
gress in commiting now to a special
Cyprus peace and reconstruction fund of
up to $230 million. Specific authoriza-
tions would be requested at such time as
a fair and equitable solution acceptable
to both parties on Cyprus is reached, or
substantial progress is made toward the
end. I intend this commitment to be a

EUROPE

symbol of the shared concern of the Ad-
ministration and the Congress for pro-
moting genuine results on Cyprus.

Peace cannot be bought. But
peacemakers should know that the
United States is prepared to go to great
lengths to ensure that their labors are
transformed into an enduring achieve-
ment. A reunified, stable, and secure
Cyprus would be such an achievement.

We need to recognize, however, that
our security assistance to Greece and
Turkey is not given as a favor but
rather to deter aggression upon NATO.
U.S. national interests are at stake.
Greek security needs deserve to be fully
met. And Turkey — working to
strengthen democracy, curb terrorism,
and defend NATO along its vast com-
mon border with the Soviet Union — also
deserves every penny we have re-
quested.

The path ahead will not be easy. But
bringing harmony to NATO's southern
flank and to the troubled island of
Cyprus is a goal worthy of our most
special efforts.

'Text from Weekly Compilation of
Presidential Documents of May 14, 1984.

U.S.-U.S.S.R. Trade and
Economic Council Meeting

by Mark Palmer

Remarks to the U.S.-U.S.S.R. Trade
and Economic Council meeting in New
York City on May 23, 1984- Mr. Palmer-
is Deputy Assistant Secretary for Euro-
pean and Canadian Affairs.

This council is meeting today at a time
when U.S. -Soviet relations are "normal."
Unfortunately since the Second World
War, the norm has been that we were
not doing much constructive business
together. With only very brief periods of
limited cooperation, practically every
year has found us focused more on our
differences than on the fact that the two
most powerful nations in the world work
together.

The past decade has witnessed
several sustained efforts at cooperation
by the United States. Speaking frankly,
we believe that each of them has been
cut short because of Soviet actions. Not
because we want to engage in an
academic exercise in history, but
because we believe greater understand-

ing is essential as we strive to open a
new and more durable period in our
relations, I would like to review our
understanding of the two most recent,
ultimately stillborn efforts by this coun-
try.

Arms Control Issues

•During the first half of 1983 we were
beginning to make some tangible prog-
ress. Both sides emerged from the round
of strategic arms reductions talks
(START) which concluded last summer
with the view that progress was being
made. We had each taken steps to meet
the other's concerns. While there was
still a long way to go, at least the direc-
tion was positive. Similarly we were able
to conclude a new long-term grains
agreement which raised the levels for
both sides. And in the United States the
release of the Pentecostals was inter-
preted as a gesture of goodwill.

We are all aware of the tragedy of
the Korean airliner. Some 61 Americans
were killed. Nevertheless in the course

EUROPE

of the fall, President Reagan proposed
further steps in both the strategic and
intermediate- range nuclear arms talks in
Geneva. He recognized, as has every
American President since Harry
Truman, that in the nuclear era, there is
no sane alternative to efforts at nuclear
arms control between the two nations
with the capacity to destroy civilization
as we know it.

Despite these sincere efforts, and
despite the fact that the United States
had agreed to sit down at the
negotiating table and to stay there for 2
years while the Soviet Union deployed
ever-larger numbers of SS-20 missiles,
when NATO began its deployments the
Soviet Union walked out of the talks.

Again, despite this negative Soviet
action, the President determined early
this year to once more attempt to move
in a positive direction.

Our policy of dealing with the Soviet
Union on the basis of strength, realism,
and negotiation was authoritatively ex-
pressed by the President in his January
16th address. At the time, he stated his
personal commitment to seeking ways to
bridge the very real differences between
our two countries.

The President subsequently reaf-
firmed and expanded on the substance
of his January 16th speech in a series of
personal letters that he despatched to
General Secretary Chernenko.

We have followed up the President's
statements in diplomatic channels. We
made clear to the Soviet leadership that
we are prepared to engage in substan-
tive dialogue on problems now before
the two countries, including many of
those issues identified by the Soviet side
as well as by the United States. In re-
cent months, Secretary Shultz has met a
number of times with Ambassador
Dobrynin in Washington. Ambassador
Hartman, who had returned several
times to Washington for special con-
sultations and meetings with the Presi-
dent on this subject, has had similar ses-
sions with First Deputy Chairman
Gromyko.

In the course of both this cor-
respondence and these meetings, we
have put forward concrete proposals.

In the field of arms control, we
have, of course, urged the resumption of
formal START and INF [intermediate-
range nuclear force] negotiations in
Geneva but have also stressed our
readiness to explore the substance of
these issues in private channels away
from any publicity and without precondi-
tions. In doing so, we have underscored
our readiness to pursue a give-and-take
process in which the concerns of both

sides and the differing force structures
of the two sides are to be taken into ac-
count.

As you are aware, during this period
we also tabled a new draft chemical
weapons treaty at the Conference on
Disarmament in Geneva. We have in-
troduced a new initiative at the conven-
tional force talks in Vienna, which at-
tempts to build upon constructive
elements of the East's latest proposals
and to find a creative way around the
longstanding dispute over data.

Regarding the Conference on Disar-
mament in Europe, we invited the
Soviet Delegation head to Washington
during this past recess. Because he was
unable to come, U.S. delegation chief
James Goodby went instead to Moscow
late last month to explore the
possibilities for moving forward and par-
ticularly to permit full discussion of
Eastern and Western proposals.

At our initiative, a team of U.S.
communications experts went to Moscow
as well in late April to discuss our pro-
posals to improve the "hotline" linking
our two capitals. Considerable progress
was made on most technical aspects, yet
the Soviet side seems to be raising
issues to prevent the early conclusion of
the draft agreement we have tabled.

In its public statements, the Soviet
Union has expressed concern over the
dangers posed by "militarization of outer
space." We have offered to conduct a
private, high-level exchange of views on
space arms control. Moreover last year,
in response to Soviet concerns, we pro-
posed discussions on the President's
Strategic Defense Initiative and its im-
plications among our governments' ex-
perts in START and the Standing Con-
sultative Commission (SCC). While the
Soviets turned aside this offer, we have
in the latest session of the SCC pro-
posed a special working group on
strategic defense issues.

We have proposed to the Soviet
Union consultations on a number of
regional issues, including southern
Africa and the Middle East. We stand
ready to proceed with such exchanges.

We have proposed a series of steps
to improve bilateral relations, which I
will not detail here.

It was logical to assume that this
long list of constructive initiatives would
have been greeted positively by the
Soviet side, at least with a recognition
that we were moving in the right direc-
tion. But quite the opposite has
occurred.

Indeed, it appears that the Soviet
Union made a deliberate decision in late
April to chill bilateral relations with us.

The Olympic boycott is but the most visi-
ble action. In addition, the Soviet side
has turned down our invitation to
Academy of Sciences Vice President
Velikhov to meet to discuss space arms
control and introduced obstacles to prog-
ress on a range of bilateral issues.

There has been a sudden, sharp in-
crease in attacks on the United States.
Senior Soviet officials had for years said
that our rhetoric was the chief obstacle
to improving relations. Now they
dismiss as of no importance the con-
structive statements of the Administra-
tion. The Soviet side called on us to
discuss a variety of subjects, from an-
tisatellite weapons to the Middle East.
We have agreed and now the Soviet
Union is unwilling to sit down to talk.

Whatever the specific motives
behind these negative actions, the pat-
tern seems to be that whenever the
Soviet leadership comes up against hard
decisions, it chooses a path that results
in no serious discussion and no practical
cooperation. This is obviously not the
Soviet role we would prefer. Rather we
seek a Soviet Union ready to be a
serious partner in negotiations on a full
range of issues as the means of building
a more constructive relationship.

We will neither be discouraged nor
intimidated by the current Soviet ap-
proach. We will neither reward nor im-
itate Soviet tactics. As Secretary Shultz
has said: "We will continue to be
realistic . . . and we will continue to be
reasonable and ready to sit down [with
the Soviet Union] whenever they are of
a like mind."

Trade Issues

One area where our two countries have
shown they can work together to mutu;
benefit is the one you are meeting to
discuss — trade. Our economic relation-
ship with the U.S.S.R. has been the sub
ject of much debate and study in recent
years. Unfortunately, much of this
discussion has taken place based on a
misunderstanding of what the Ad-
ministration's policies toward economic
relations with the Soviet Union actually
are. I hope to clear up some of that con
fusion today.

Our policy toward trade with the
U.S.S.R. is clear. Trade can go forward
as long as it is mutually beneficial, does
not subsidize the Soviet economy, and
does not contribute to the Soviet
strategic or military capability. Let me
stress this — our policy is not one of
economic warfare. We have been able b la
take a number of small positive steps ol lit
benefit to both sides in the field of

HUMAN RIGHTS

j cade. This was in accord with our ef-
Drts to preserve the structure of our
conomic relationship with the Soviets.
Ve want that structure in place to build
pon if future conditions permit.

• We signed a new long-term grain
greement providing for a 50% increase
1 the minimum Soviet purchase require-
lent last August.

Our fisheries agreement with the
oviets, which permits the joint fisheries
enture to operate in Seattle and
lakhodka, has been renewed three
mes, most recently for an 18-month
»rm.

We are currently considering the
mewal of our 10-year long-term
xmomic, industrial, and technical
^operation agreement. We are hopeful
lis agreement can be extended.

Last October, the U.S.-U.S.S.R.
rade and Economic Council cospon-
>red an agribusiness trade show in
oscow. We think this is a good exam-
e of the kind of trade between our two
>untries for which our policy calls. We
idorsed that exhibition, as we are sup-
>rting this plenary session with our
•esence. We will continue to support
uncil activities appropriate to our
ilicy on trade with the Soviet Union.

Additional steps forward in the
ade relationship are possible,
awever, the prospects for such steps
ill necessarily be influenced by the
>viet approach to our concerns across
e broad range of our relation-
ip — arms control, regional issues,
iman rights, as well as trade.

Trade is not a "golden bridge" that
• itself will lead to better relations be-
'een our two countries. But it can be

important part in a process of slow
pansion and improvement of relations
many fields. That is our hope; that is
ir objective.

I cannot appear before an audience
lich includes a number of influential
ficials from the Soviet Union without
entioning a case which weighs heavily
i the minds of the American people to-
.y. There is great warmth in this coun-
y for the peoples of the Soviet Union,
hen we are together as human beings,
ere is a natural affinity, a spontaneous
}seness and respect. When we think
out you, we remember most of all
ur incredible courage during the war
id the great intellectual contributions
id courage of individual Russian
riters, scientists, and others through-
it history. Among your many extraor-
nary peoples, there are two who are
irticularly close to our hearts — a

Jly 1984

woman who was wounded three times in
the war and a man who was honored
with every possible Soviet award and
the Nobel Prize for Peace. We earnestly
hope that you will be true to the best of
your traditions and respond to their ap-
peal. They are following the path of non-
violence which Tolstoy and Gandhi trod.
They deserve your respect and support.
In closing, let me reiterate that for
our part we will continue to look for

ways our two countries can work
together. We are prepared to be patient.
As the President stated in his January
16th speech: "Our policy toward the
Soviet Union ... is a policy not just for
this year but for the long term ... we
want more than deterrence; we seek
genuine cooperation; we seek progress
for peace." ■

The Baltic States' Struggle for Freedom

by Elliott Abrams

Address before the 3d annual Human
Rights Conference of the Baltic-American
Freedom League in Los Angeles on
March 17, 198b. Mr. Abrams is Assistant
Secretary for Human Rights and
Humanitarian Affairs.

Students of European history all know
that toward the end of the 18th century
the kingdom of Poland was partitioned
three times among its neighbors and, as a
result, the Polish state ceased to exist.
Students of European history also know
that liberal opinion throughout Europe
was scandalized by Poland's fate, and that
this feeling of indignation over a terrible
historical injustice done to a "martyr na-
tion" was a potent factor in the rebirth of
the Polish state in the aftermath of World
War I.

I mention these facts here tonight not
because they are unknown to anyone in
this audience— on the contrary, I am sure
they are quite well known to all of you—
but rather because the difference in the
reactions of liberal opinion to the fate of
Poland in the 19th century and the fate of
the Baltic states in the 20th century has
been so very striking. In the case of
Poland's loss of statehood, "enlightened
public opinion" was genuinely outraged.
In the case of the Baltic states, however,
"enlightened public opinion" has often ap-
peared considerably less than outraged at
the forcible incorporation of three sover-
eign states into the Soviet Union and the
subsequent tragic fate of the Baltic
peoples. It seems to me that this lack of
interest in the Baltic states is both
astonishing and revealing, and I propose
to examine its causes tonight. First,
though, let me read you excerpts from a
statement by President Reagan which
provides the immediate historical back-
ground to the current situation. The

President's proclamation was issued on
June 13, 1983, to commemorate Baltic
Freedom Day:

In 1940, Soviet armies invaded and oc-
cupied the independent countries of Lithuania,
Latvia, and Estonia. The peaceful Western-
oriented Baltic nations were crushed by the
force of arms of their hostile neighbor. Under
the cynical arrangements of the infamous
Ribbentrop-Molotov agreement, the Soviet
Union forcibly incorporated the three Baltic
Republics into its empire.

Following the Soviet takeover, tens of
thousands of the Baltic peoples were subject to
imprisonment, deportation, persecution, and
execution. Their religious, cultural, and
historical heritage has been denigrated. The
foreign political system which now controls
their homelands has attempted to force these
unwilling people to accept an alien life of
totalitarian domination. Bui. it has failed.

Today, the Baltic peoples continue to
struggle to attain the freedoms we enjoy.
These men and women still suffer harsh im-
prisonment, banishment, and persecution for
their beliefs. Brave Lithuanians, Latvians, and
Estonians still seek to exercise their human
rights to think, speak, and believe as their con-
science directs them.

President Reagan went on to endorse
the Baltic peoples' "right to determine
their own national destiny," a view which
the American people strongly endorse.
Nevertheless, the fact remains that
human rights violations in the Baltic
states are rarely reported in our media.
Among the group of states which calls it-
self nonaligned, moreover, the struggle of
the Baltic peoples for self-determination
has never been recognized, despite the
professed adherence of the Nonaligned
Movement to the cause of self-determina-
tion. And at the United Nations, where
ringing denunciations of colonialism have
become, by now, a staple of UN rhetoric,
virtually the only time you hear about
Soviet colonialism in general— and about
the plight of the Baltic states in particu-

HUMAN RIGHTS

lar— is when the United States raises the
subject. So I return to the question with
which I began: Why this silence? Why
this lack of interest?

The Soviet Union as a
"Progressive" Force

Part of the reason, it seems to me, has to
do with the fact thai the Soviet Union is
still seen by some people as a "progres-
sive" force in world politics. In the 19th
century, of course, tsarist Russia occu-
pied a very different position in the eyes
of public opinion. It was seen as the epit-
ome of reaction, the most formidable ob-
stacle to political progress. "I do not trust
any Russian. As soon as a Russian worms
his way in, all hells breaks loose." So
wrote one of the most famous 19th cen-
tury progressives, Karl Marx, and he was
far from alone in harboring such senti-
ments. Under these circumstances, it is
not at all surprising that liberals seized
upon Russia's role in the partition of
Poland as yet another illustration of the
incorrigible character of the tsarist state.

In the wake of the Bolshevik revolu-
tion, of course, all this changed. Suddenly,
"the last had become first"— the world's
most reactionary state was transformed
overnight into the world's most progres-
sive state. While disillusionment with the
Soviet Union has since set in— to the point
where criticizing Moscow is no longer
thought of, in "progressive" circles, as a
crime against humanity— the tendency to
"apologize" for Soviet actions, "to ex-
plain"—and thereby subtly excuse— So-
viet crimes remains in force even today.
Thus, we are told that the Soviet annexa-
tion of the Baltic states must be under-
stood in terms of the imperatives of
Soviet history, foremost among which has
been the search for security. We are also
told that the Soviet leadership is chroni-
cally "insecure" and that Baltic independ
ence would bruise the tender psyches of
Politburo members. In short, the incor-
poration of the Baltic states into the
Soviet Union and the deprivation of the
human rights of the Baltic peoples by
Soviet authorities|are seen, somehow, as a
necessary contribution to the mental
health of the Soviet leadership.

I do not think there is any need to
spend much time over arguments of this
sort. The spurious character of this line of
reasoning becomes apparent the moment
we begin to inquire whether Soviet incor-
poration of the Baltic states has alleviated
Moscow's sense of insecurity. Well no, we
are told, the Soviets are still insecure— so
insecure, in fact, that they are compelled
to dominate the rest of Eastern Europe;
to threaten Western Europe with their
missile deployments; to send troops into

Afghanistan; to undertake the largest
peacetime military buildup in history; and
to intervene in Africa, the Caribbean, and
Latin America. At this point, it becomes
very clear that the argument about Soviet
"insecurity" is no more than a convenient
justification for Soviet imperialism.

The "Realistic" Point of View

There is, however, a more sophisticated
argument which is sometimes used to jus-
tify a lack of interest in the fate of the
Baltic states. This argument purports to
be based on "realism." The Soviet incor-
poration of Lithuania, Latvia, and
Estonia— these so-called "realists" con-
tend—is a fact of life. It may have been
immoral, and we may not like it, but it is
irreversible; nothing can be done about it.
And since nothing can be done about it,
nothing should be done about it. After all,
why engage in futile gestures which can
only serve to exacerbate Soviet- American
relations?

Because this kind of reasoning ap-
pears to be based on a hard-headed ap-
praisal of the facts, it appeals to quite a
number of people, many of whom are not
at all pro-Soviet or "progressive" in their
general political orientation. For this
reason, it tends to be much more effective
than the obviously spurious Soviet "inse-
curity" argument. Nevertheless, it, too, is
extremely misleading. There are three
questions, in particular, which demon-
strate the fallacy of the "realistic" point
of view.

• The first question one should ask
the realists is this: was it "realistic" for
Churchill to defy Hitler in 1939 and for de
Gaulle to insist that he, rather than Mar-
shal Petain, was the legitimate spokes-
man for France? In our own history, was
it realistic to think that 13 small colonies
could defeat the British empire and
establish a lasting, united, democratic
order?

• The next question one should ask is:
if the Baltic people were allowed to deter-
mine their future in free elections, can
there be any doubt, realistically, over
what the outcome of those elections
would be?

• And the third question I would ask
is this: in an age such as ours when all the
colonial empires but one have vanished,
when even old and established nations are
confronted by separatist movements— in
such an age, is it realistic to assume that
the sole remaining colonial empire, the
Soviet empire, will survive forever?

These questions, I think, point out the
fallacies in the so-called "realistic" point
of view. The simple fact is that nations,
and even civilizations, do not survive by

realism alone. During the Dark Ages, for
example, it may not have been realistic
for a handful of monks, secluded in vari-
ous monasteries throughout Europe, to
hope that Christianity would survive.
But, in large part due to their efforts, the
Christian faith did survive. Today, some
may find the struggle of the Baltic
peoples to hold on to their national cul-
tures and their dream of national inde-
pendence unrealistic; but it may well be
precisely this lack of realism that will
triumph in the end.

The prospects for the Baltic peoples
to regain their national independence im-
prove considerably, moreover, once we
take a longer view of history. When we
do so, we can see at once that the Soviet
empire is actually a historical anachron-
ism—clearly at variance with the great
historical currents of our time. In the
aftermath of the American Revolution,
there existed only two democracies: the
United States and Switzerland. The rest
of the world consisted overwhelmingly of
monarchies and empires. Today, nearly
all the monarchies are gone; all the em-
pires but one are gone; and there are
some 50 democracies. Is there any real-
istic reason to assume that this trend can
be reversed?

The great fallacy of the so-called
"realistic" school of thought is that its
horizons are limited by its particular mo-
ment in history, which it wrongly
assumes will continue indefinitely. In the
case of the Soviet empire, this leads to
the assumption that it is impregnable,
when in fact it is already being eroded by
the vast tides of history. In this respect,
Soviet leaders appear to be more realistic
They are aware that demographic trends
are leading to a majority non-Russian
population in their empire by the end of
this century. As a result, they have
stepped up the attempt toward linguistic
and cultural homogenization. Soviet
leaders now speak of the "fusion of na-
tions" as the "final goal" of the party's
nationalities policy. Indeed, the Soviet
constitution poses "social homogeneity"
as a goal of the Soviet state.

The Baltic peoples are particularly-
vulnerable to such a policy. Their own
populations were diminished by the
casualties inflicted during World War II,
by emigration, and by the massive depor-
tations that accompanied Sovietization.
Moreover, they have had to absorb an un
usually large in-migration of non-Baltic
persons, mostly Russians, from the Sovie
Union. By 1970, 1 million non-Baltic
Soviet citizens had moved to the Baltic
coast. Eighty percent of them settled in
the two smallest states, Latvia and
Estonia, whose combined total populatior >
in 1970 was only 3.7 million. According to

HUMAN RIGHTS

ita in the 1979 Soviet census, in-migra-
on to the Baltic states continues and
nounted to an additional 226,000 persons
jring 1970-79.

As a consequence of this inflow of
ttlers, by 1983 only about 53% of the
Dpulation of Latvia consisted of ethnic
atvians, compared to 77% in 1939. For
stonians, the figure was about 63%,
>mpared to 92% during independence.
nly in Lithuania, because of its higher
rth rate and lower rate of in-migration,
Des the proportion of Lithuanians appear
i have actually increased slightly to 80%.
ata in the 1979 Soviet census suggest,
Dwever, that the rate of natural increase

Lithuania has dropped substantially,
hile the rate of in-migration has in-
•eased by almost 60%. Lithuania may
>on be faced with demographic changes
milar to those of its Baltic neighbors.

Moreover, most Russians who move
i the Baltic states continue to use their
itive language, and the teaching of Rus-
an is given a privileged position by law.
s a result, there is strong pressure on
ie Baltic population to acquire and use
ussian in school, at work, in everyday
irsuits such as shopping, and in govern-
ent and political activities. There is a
meral trend, most marked in Latvia and
stonia, toward increased use of Russian

higher education for teaching the sci-
lces, while the Baltic languages are re-
rved for "soft" subjects such as the
if -ts. This has aroused anxiety that these
nguages, a principal repository of Baltic
hnic identity and culture, are destined

become linguistic relics.

he Quest for Human Rights

hese trends underscore the necessity
r the United States to do its utmost to
•inforce the distinctive national identity
' the Baltic peoples. President Reagan
early understands this. On Novem-
=sr 18, 1983, in a message announcing the
itablishment of a new Baltic States Ser-
ce Division of Radio Liberty, the Presi-
3nt declared:

The establishment of the Baltic radio divi-
on reaffirms the United States policy of not
'cognizing the forcible and unlawful incorpo-
ition of Estonia, Latvia, and Lithuania into
ie Soviet Union. The new call signal, "the
altic States Service of Radio Liberty," will
Enforce the distinct identities of the Baltic
tates and separate them from the rest of the
oviet Union.

Another means available to the
Jnited States to reinforce the distinctive
ientity of the Baltic states is by giving
/ide prominence to specific instances of
! uman rights abuse. I am pleased to
eport that we in the State Department

uly1984

are, indeed, doing this. Our Country
Reports on Human Rights Practices con-
tains a separate report on Estonia, Lat-
via, and Lithuania— a report, I might add,
which did not exist under the previous
Administration. At international human
rights fora, such as the recently con-
cluded Madrid conference, Ambassador
Max Kampelman raised specific cases of
Soviet human rights violations in the
Baltic states— cases like that of Juris
Bumeisters, a Latvian Social Democrat
sentenced to 15 years in a strict regime
camp for his political convictions; Dr.
Algirdas Statkevicius, a member of the
Lithuanian Helsinki monitoring group
sentenced to compulsory psychiatric
treatment for engaging in "anti-Soviet
agitation and propaganda;" and Dr. Juri
Kukk, an Estonian human rights activist
who died of a hunger strike in a transit
prison where he had been sentenced for
"anti-Soviet agitation and propaganda."
At a meeting of the UN Human Rights
Commission, which ended only yesterday,
Ambassador Richard Schifter cited the
cases of two Latvians who have recently
received long prison sentences. They are
Gunnars Freimanis, who was sentenced
to 4 years in a strict regime camp and 2
years of internal exile, and Gunnars
Astra, who was sentenced to 7 years of
incarceration and 5 years of internal exile.
One of the charges against Astra was that
he had distributed a Latvian translation
of George Orwell's 198^. Needless to say,
we shall continue to protest these and
other human rights violations.

It is important to stress, moreover,
that in trying to improve the human
rights situation in the Baltic states, the
United States is not simply helping the
Baltic peoples; we are also helping our-
selves. The quest for human rights is not
only a moral crusade; it is also directly
related to Western security. To under-
stand why this is so, we must recognize
that throughout the Soviet colonial em-
pire—and I include the captive nations of
Eastern Europe as part of that colonial
empire— a fateful struggle is currently
underway. The struggle is between gov-
ernment and society, and the issue at
stake is a fundamental one: can there be
such a thing as a genuinely autonomous
sphere of private life under communism,
or is the government entitled, at any time
and for any reason, to invade, control, or
take over every facet of life?

The implications of this struggle for
Western security should be obvious. If
communist governments were ever to
grant their citizens any clearly defined,
inalienable rights, then the ability of rul-
ing communist parties to mobilize the
populace against the West would become

strictly circumscribed. The great, indeed
the paramount, question of whether the
world is to be at peace or at war would no
longer depend, as it does today, on how a
handful of communist rulers interprets
the so-called "correlation of forces." In-
stead, society in communist countries
would be able to exert a restraining influ-
ence on the policies and designs of the
communist ruling class.

Of course, the principal aim of the
totalitarian political system established
by Lenin and Stalin in the Soviet Union,
and imposed by the Red Army on the
people of Eastern Europe, is to prevent
any such development from occurring. By
bringing the enormous power of the state
to bear against society, the communist
oligarchy believes that it can prevent the
development of society as an independ-
ent, self-organizing, autonomous force.
For this reason, it categorically refuses to
accept the idea that an individual enjoys
inalienable human rights— rights, that is,
that are his simply by virtue of his hu-
manity and are beyond the power of the
state either to confer or revoke. The poli-
cies stemming from that refusal are as
well known as they are contemptible.
Soviet and East European citizens trying
to monitor their governments' compliance
with the human rights provisions of the
Helsinki accords have been attacked, im-
prisoned, and placed in mental institu-
tions. Emigration has decreased dramat-
ically. The brave men and women who
signed the "Baltic Appeal" in 1979 calling
for a repudiation of the Nazi-Soviet pact
and the restoration of full self-determina-
tion to the Baltic states have been sent to
labor camps, exiled, or confined to psychi-
atric hospitals. Fathers Tamkevicius and
Svarinskas have been sent to prison
despite petitions signed by some 81,000
Lithuanians on their behalf.

Some of these repressive measures
may well succeed in the short term. In-
dividuals can be silenced— for a while;
trade unions can be outlawed— for a
while; even an entire people can be placed
in shackles— for a while. Ideas, how-
ever, cannot be destroyed, and what de
Tocqueville said almost 150 years ago
about the idea of democracy applies with
equal force to the idea of human rights:
"It is universal, it is durable, it constantly
eludes all human interference, and all
events as well as all men contribute to its
progress." For that reason, I am confi-
dent that the last word on the human
rights situation in the Baltic states— and,
indeed, on the human rights situation
throughout the Soviet bloc— has not yet
been spoken.

There is another factor, quite apart
from the long-term historical trends in

MIDDLE EAST

favor of democracy and human rights,
which provides a basis for optimism about
the future of the Baltic states. In 1936,
when Stalin was informed that one of his
intended victims was putting up an unex-
pected resistance, he is said to have
asked: "Do you know how much our state
weighs, with all the factories, machines,
the army, with all the armaments and the
navy? . . . Can any one man withstand the
pressure of that astronomical weight?"
Well, today we know that when men and
women are armed with the idea of human
rights, they are capable of withstanding
the "astronomical weight" of the Soviet
state. I am referring, of course, to indi-
viduals like Zanis Skudras, Reverends
Alfonsas Svarinskas and Sigitas
Tamkevicius, Mart Niklus, and a host of
other lesser known men and women who
comprise the movement for human rights
in the Baltic states and who have been un-
justly prosecuted because of this. It
seems perfectly obvious to me that as
Western public opinion involves itself in
their struggle, we rediscover the moral
wellsprings of our own democratic way of
life and regain the moral self-confidence
necessary to conduct an effective defense
against the onslaught of totalitarianism.
For the human rights activists in their
dedication to the idea that men are of
right free, in their sacrifices for that free-
dom, in their reminder to us that this
freedom is no abstraction but the very
core of their lives as individuals— in all
this, they show us that this struggle for
liberty against oppression is the great
moral struggle of our time.

In a recent audience with more than
1,000 Lithuanian pilgrims, Pope John
Paul II urged them to "remain in soli-
darity with the church in your land of
origin." I would like to take this oppor-
tunity to declare my solidarity, and the
solidarity of the Reagan Administration,
with the people of Lithuania, Latvia, and
Estonia and to applaud you for your work
on behalf of the Baltic peoples. Their
cause is just; their courage is awesome;
and their faith is inspiring. I am con-
vinced that their struggle will be crowned
with success. ■

U.S. Response to Saudi Request
for Military Assistance

by Michael H. Armacost

Statement before the Subcommittee
on Foreign Operations of the Senate Ap-
propriations Committee on June 5, 1984.
Ambassador Armacost is Under
Secretary for Political Affairs.1

I welcome the opportunity to discuss the
Administration's decision to respond
favorably to specific Saudi requests for
military equipment and support. Before
addressing our recent decision to sell
Stinger missiles to Saudi Arabia and
send an air force KC-10 tanker to the
Kingdom, I would like to note how those
decisions complement our broader policy
not only in the gulf but throughout
Southwest Asia.

Our policy in the gulf enjoys broad
bipartisan support and reflects the deci-
sions of two Administrations. It consists
of four crucial elements:

• A clear recognition of the need to
ensure the free flow of oil to the West;

• The strategic necessity of contain-
ing the expansion of Soviet and other
radical influence throughout the region;

• A consequent need to respond
firmly and decisively to requests from
the gulf states for appropriate and
justifiable security assistance. The states
in the area must be confident that our
interests in the gulf are sufficiently im-
portant for us to help in a crisis. The
United States has to be seen as a credi-
ble partner in the search for stability
and security; and

• Whatever steps we take must
complement our efforts to achieve peace
between the Arab states and Israel. Our
Middle East policy is built on the
premise that we can foster and en-
courage a secure, strong, and confident
Israel while, at the same time, helping
to ensure that our moderate Arab
friends have the support and assistance
they need to oppose Soviet and radical
expansionism in the area. These two
goals are not contradictory; they are
mutually supportive. Our policy toward
the war in the gulf reflects that reality.

Regional Security Concerns

The Iran-Iraq war has gone on for near-
ly 4 years — at enormous cost in human
lives and treasure. The land war re-
mains stalemated, without any prospec-
tive end in sight. The Iranians have

amassed heavy forces in the south in
preparation for a major offensive. We
do not believe the result of such an of-
fensive, if it comes, will alter the
stalemate. The Iranians remain adamant
in their demand for a military victory
and the fall of the Iraqi Government. As
long as Iranian intransigence continues,
a diplomatic solution will be difficult to
achieve.

Nevertheless, we must continue to
exert our efforts, along with our friends
and allies, to seek an end to the fighting
and a negotiated settlement through
diplomatic means. We have pursued this
course bilaterally as well as multilateral-
ly, including in the United Nations. We
have made clear that we are neutral in
the war, we uphold the sovereignty and
territorial integrity of both sides, and w<
sell arms to neither. We have been par-
ticularly concerned about attacks on
nonbelligerent shipping serving neutral
ports, which is a dangerous escalation
and widening of the war. However, as
we have stated in the past, we have
deplored attacks on all nonbelligerent
shipping and firmly support the right of
freedom of navigation in international
waters.

The gulf states share our desire to
deescalate the current threat through
diplomatic rather than military means.
Should diplomatic efforts fail, the gulf
states believe they can defend their
ships and oil installations primarily with
their own military resources. It is in our
interest to support the efforts of Saudi
Arabia and the gulf states to provide foi
their own defense. We believe that the
United States should encourage those
states which seek to acquire the means
of protecting themselves from aggres-
sion rather than depending on forces
from the outside.

Only as a last resort would the
United States consider direct military in
volvement— and then only in ap-
propriate circumstances and if we were
asked to do so. American military ac-
tions in the gulf would require the
cooperation of the gulf Arab states to
provide the necessary facilities. We
would also consult closely with Con-
gress. We would have intensive discus-
sions with our major allies to see what
mutually helpful roles we could play.

Our interests and those of our
closest allies and friends are directly
threatened by the escalation of the war

an?
r.

Department of State Bulletin)

MIDDLE EAST

i the gulf. The Iraqi attacks on snip-
ing and the Iranian retaliatory attacks
i nonbelligerent shipping to neutral
3rts has raised the war to a new and
ingerous level. In its first three attacks
i oil tankers, Iran appears to have
liberately targeted Kuwait- and Saudi-
ag ships near the Saudi coast. Saudi
rabia, as the largest of the Gulf
ooperation Council (GCC) states with
le most extensive infrastructure and oil
.cilities, could be directly threatened by
irther escalation. If the war spreads to
lese GCC states, it could endanger
audi Arabia and deny crucial oil sup-
ies to much of the free world.

Access to Persian Gulf oil is vital to
e world economy. Some 20-25% of the
1 consumed in the free world is pro-
iced in the gulf, which is now export-
g nearly 8 million barrels of oil per
ly, much of it to our major allies in
urope and Asia. Although only 3% of
tr oil comes directly from the gulf, we
nnot be isolated from the world oil
arket. Disruptions in the market and
e concomitant increase in prices that
uld follow would directly and adverse-
affect the United States. The recovery
>w underway in our own economy and
at of the rest of the world could be cut
ort.

jsponse to Saudi Request

e, therefore, faced — indeed, we con-
lue to face — a dangerous situation
iich threatens vital Western interests,
such a situation, it is natural and sen-
)le to support the efforts of the gulf

! ites to provide for their own defense,
tudi Arabia, facing an immediate
nger to its security, requested on May
d to purchase on an urgent basis air
fense-related equipment. The principle
at a sound defense is the basic deter-
int to aggression has long been a fun-
mental premise of U.S. policy that has
joyed broad public support.

In addition to requesting accelerated
livery of certain munitions already in

le sales pipeline, the Saudis sought im-
ediate delivery of Stinger air defense
issiles and provision of aerial refueling
pability for their F-15s.

These requests are clearly related,
lr own concept of air defense calls for
layered system. The basic idea is to in-
rdict an intruder as far out as possible,
th your planes, and from there work
.ck through long-range area defense
issiles to short-range or point defense
individual targets. Tanker support in-
eases the duration and effectiveness of
mbat air patrols, the Stinger enhances
lint defense. Both items were needed

Jly 1984

urgently, and we were determined to
respond immediately.

Our response to the military require-
ment must be seen in the political con-
text in the region.

First, Iran must understand that the
desire we, our allies, and the states in
the region have for a peaceful solution is
not a reaction born of weakness.
Statements without action to support
them have no deterrent effect and may
invite aggression. Provision of the
Stingers and the tanker are firm proof
of our support for the principles we have
been declaring. This step was taken

without the deployment of American
troops or direct action on our part. In-
deed with these actions we sought to
make direct intervention unnecessary.
They were consistent with the desire of
Saudi Arabia and the gulf states to han-
dle the problem themselves.

Second, we also had to look at the
political implications of our decision on
our relations with Saudi Arabia and the
moderate Arab states. Our bilateral rela-
tionship with Saudi Arabia is the
keystone of our strategic interests in the
gulf, and central to that relationship is
our security assistance program. If we
failed to provide urgently needed sup-

U.S. to Supply Military
Equipment to Saudi Arabia

DEPARTMENT ANNOUNCEMENTS,
MAY 29, 19841

I have two announcements to make with
regard to supply of military assistance
and sales to Saudi Arabia.

With regard to tankers, the United
States is augmenting the aerial refueling
tanker unit assigned to Saudi Arabia
from three tankers to four tankers to
enhance support operations of the U.S.
AW ACS [airborne warning and control
system aircraft] and Saudi F-15s.

One additional aircraft — a KC-10
Extender— has been deployed to supple-
ment the three KC-135s already pres-
ent. The United States has deployed
aerial tankers in Saudi Arabia as part of
the AW ACS operations since 1980. The
additional tanker aircraft could be used
to fuel U.S. aircraft stationed in Saudi
Arabia or Royal Saudi Air force F-15
aircraft.

U.S. aerial tankers have operated
with Saudi F-15s in the past as part of
our training program. We approved the
sale of DC-3 aerial tankers to Saudi
Arabia in 1982. The Saudi tankers will
be delivered beginning in 1986. There
has been no decision as to the length of
stay of the additional tanker aircraft.

As to an emergency sale of Stingers,
in recent days, neutral shipping has been
attacked with increasing frequency and
in an ever-widening area in international
waters in the gulf. Further escalation
could threaten Saudi Arabia and oil sup-
plies on which much of the free world
depends. In view of the urgency of the
situation and our long and close relation-
ship with the Saudi Kingdom, the Presi-
dent has authorized the immediate sale

to Saudi Arabia of 200 Stinger short-
range, air defense missile systems (i.e.,
launchers and missiles) and an additional
200 missile reloads. Due to the current
emergency circumstances, which require
an immediate sale in the national securi-
ty interests of the United States, the
President acted under his special
authority in Section 36(b) of the Arms
Export Control Act to waive the normal
30-day waiting period after congres-
sional notification.

The Stinger launchers and missiles
are being transferred immediately.
Saudi Arabia has agreed to strict
safeguards to ensure the security of the
missiles and will pay the full cost for the
system and its transportation. Because
the Stinger system can be deployed in
the field shortly after delivery, its im-
mediate transfer will quickly contribute
to Saudi Arabian air defenses. By pro-
viding a deterrent against hostile ac-
tions, this transfer lowers the risk of
broader conflict. The President's deter-
mination reflects U.S. grave concern
with the growing escalation in the gulf
and its implication for the security of
our friends in the region.

In light of the unstable situation in
the gulf, we also are advancing, by
about 3 months, initial delivery of con-
formal fuel tanks (CFTs) for Saudi
F-15s. These CFTs are part of an order
for 101 tank sets which were sold to
Saudi Arabia in 1981. Finally, we are
expediting delivery of some ammunition
and spare parts for items already in the
Saudi inventory.

'Read to news correspondents by acting
Department spokesman Alan Romberg. ■

UNITED NATIONS

port, at a time of clear and undisputed
emergency, we would seriously undercut
the common understanding which sup-
ports the very structure of our bilateral
relationship.

Finally, we had to be certain that
the provision of the Stinger dovetailed
with our other major strategic interests
in Southwest Asia. A central concern
was that the equipment be adequately
safeguarded so it did not pose a threat
to any of our friends by falling into the
hands of terrorists. We are confident
that the rigorous system of safeguards
on the Stinger meets the most exacting
criteria. Also, we firmly believe that
helping the gulf states oppose radical ag-
gression not only supports our goals in
the area but also makes the region a
more secure and stable place for our
many friends.

Once we had made the basic decision
to respond, we had to address the issue
of how fast and how many. It was clear
that we faced an emergency military re-
quirement. It was essential that we send
a clear and unequivocal signal, to friend
and adversary alike, that we will sup-
port our friends when they need help.
The President concluded that the impor-
tant national security interests involved
justified his use of the special waiver
authority. The decision was not made
lightly; this is the first time that the Ad-
ministration has used this provision of
the law. The waiver authority was used
only once previously— by the Carter Ad-
ministration to provide arms to Yemen.
Yet the need on this occasion was im-
mediate, real, and critical. It required a
decisive and expeditious step, and the
President acted accordingly.

The decision to send 400 Stingers
reflected our assessment of the im-
mediate threat and the availability of
Stingers in the U.S. inventory. We were
convinced that we needed to send a
militarily significant quantity rather
than make a purely symbolic gesture.
We took into account the views of con-
gressional leaders. We consulted infor-
mally over several days, eliciting in
response a wide variety of views.

Our rough calculations showed that
the Saudis, if they were to defend all
threatened areas, could certainly make
use of a considerably larger number of
Stingers than were provided. After in-
tensive deliberations in the Administra-
tion, and weighing the results of our
consultations, we decided that 200
systems with 200 refires (a total of 400
missiles) was an appropriate response
and could be provided from available
stocks.

Our decision to send a KC-10 tender
to Saudi Arabia complements the
Stinger sale. The former will give the
Saudi Air Force increased loiter time,
thereby enhancing its defensive
capabilities. The latter supplies needed
point defense.

Our decisions were a prudent yet
clear response to an escalating emergen-
cy which threatens Saudi Arabia. They
satisfied a clear military need. In addi-
tion, by providing the missiles rapidly in

response to an immediate need, as well
as sending the additional tankers, we
sent a political signal of both
reassurance and deterrence. It was a
measured response which promotes
regional stability and security.

JThe complete transcript of the hearings
will be published by the committee and will
be available from the Superintendent of
Documents, U.S. Government Printing Of-
fice, Washington, D.C. 20402. ■

Challenge to Israel's
Participation in UPU

DEPARTMENT ANNOUNCEMENT,
JUNE 14, 19841

The 19th Universal Postal Union (UPU)
Congress will be held in Hamburg from
June 18 to July 27. Regrettably some
Arab countries are sponsoring a move to
expel Israel fronm the UPU, continuing
the ill-considered campaign against
Israel's participation in the UN system
that we have witnessed in other UN
forums during recent years.

The United States will oppose this
move with all available diplomatic
resources. We know that many other
countries will likewise oppose this inroad
against the principle of universality
underlying the United Nations.

The United States has repeatedly
declared that an attack on Israel's right
to participate in any UN organization, if
successful, would have grave conse-

quences for its own continued participa- -
tion and support. U.S. policy was fully
explained by Secretary Shultz on Oc-
tober 16, 1982. The United States
wishes to make it clear that Israel's ex-
pulsion from the UPU at the Hamburg
congress would immediately cause us to
pull our delegation out of the congress,
suspend our participation in UPU ac-
tivities, and withhold payments to the
UPU. The suspension of our participa-
tion and the withholding of our
payments would continue until the illega*
action was reversed.

This stand reflects the strong senti-
ment of the American people and is em-
bodied in Public Law 98-164 passed by
the Congress in November 1983.

'Read to news correspondents by Depart-
ment spokesman John Hughes. ■

Department of State Bulletin

VESTERN HEMISPHERE

f\s\\ of El Salvador':
Resident-Elect

President-elect Jose Napoleon Duarte
the Republic of El Salvador visited
'ashington, D.C., May 19-23, 198A.
ollowing is the joint communique
sued after his meeting with President
eagan.

DINT COMMUNIQUE,
AY 21, 19841

■esident Ronald Reagan and President-elect
se Napoleon Duarte have undertaken con-
ltations together, May 21, 1984, in recogni-
m that a new chapter in the history of El
.lvador as a democratic nation is about to
enacted.

During the past three years, Salvadorans
widely differing political views have joined
jether in a process of building democracy
lich has moved successfully through the
iges of elections for a constituent assembly
March 1982, approval of a new condition
d the presidential elections, just completed,
e United States applauds this historic proc-
; and proudly welcomes President-elect
larte as the first freely and directly elected
.der of democratic El Salvador.

The two Presidents, having reviewed the
jhlems of Central America, which are of
icern to free people throughout our
misphere, hereby express their joint views
i conclusions regarding the future basis of
derstanding and collaboration between
;ir two nations. We agree on three major
iectives for Central America and
Salvador.

1. The strengthening of democratic in-
tutions;

2. The improvement of living standards
1 expanded economic development;

3. The need for an increased level of U.S.
;istance to obtain peace and to defend
iinst Communist-supported guerrillas of

■ extreme left and the violence of the ex-
me right.

The peoples of both nations look forward
the coming five-year term of elected
/ernment in El Salvador as a period of
isolidation of bilateral relations in a spirit
deep friendship as close neighbors in our
nisphere. Both nations will take into ac-
mt their common interests and problems,
intaining the fullest respect for each
ler's sovereignty,

Both nations share with other countries
the Americas a fundamental interest in the
engthening of democracy and the firm re-
tion in this hemisphere of any form of
alitarianism or outside interference in the
airs of sovereign nations. Democracy
lances their individual and collective
■urity. Democratic neighbors are peaceful
ghbors, capable of regulating their rela-

ly 1984

tions in a framework of cooperation, consulta-
tion, mutual respect and peaceful settlement
of differences.

It is a fundamental objective of the
Duarte administration to broaden and
strengthen El Salvador's democratic institu-
tions. And it is the intention of the United
States to provide support and assistance to
help achieve that objective.

Both Presidents proclaim that democracy,
justice and the rule of law require the par-
ticipation and commitment of all sectors in
the political and economic mainstream of the
nation. The rule of law requires protection
for all against violence and criminal actions.
It requires full confidence that the judicial
process will produce punishment of the guilty
and timely justice with due process for all.
Both Presidents reaffirm their staunch com-
mitment to the promotion of human rights,

which are central to the democratic process
and our freedoms. They believe that there
should be greater support for genuinely
democratic organizations from public and
private sources in the major democracies,
such as in the U.S. National Endowment for
Democracy.

The two Presidents pledge to work for
the achievement of economic development
and growth, and increased regional coopera-
tion, to improve the standard of living of the
people of EI Salvador and throughout the
hemisphere. President-elect Duarte joins
President Reagan in support of the com-
prehensive legislative proposal now before
the U.S. Congress which will contribute so
greatly, once enacted, to Central American
peace and prosperity. The two Presidents ex-
press the view that a continuing and healthy
economic assistance relationship between the
two countries will be needed over the years
immediately ahead. Such a relationship will
complement broader initiatives, such as the
Caribbean Basin Initiative and the National
Bipartisan Commission Report, so that El
Salvador's interdependent economic and
social objectives can be met.

Election of El Salvador
President Duarte

PRESIDENTS STATEMENT,
MAY 18, 19841

On Wednesday, May 16, the Central
Elections Commission of El Salvador
certified Jose Napoleon Duarte as the
winner of the May 6 presidential election
in that country. By this act, the people
of El Salvador have made clear their
choice of Mr. Duarte as the first
popularly elected President of that coun-
try in recent history.

The voters have chosen as President
a man who has dedicated his life to
achieving democracy and reform for his
homeland. We congratulate President-
elect Duarte on his victory and pledge
that we will do all in our power to
strengthen the ties of freedom and
democracy that unite us.

Mr. Duarte carried with him a clear
mandate from the people of El Salvador,
over 80% of whom voted on May 6, that
democracy and the vote should deter-
mine their future. The United States
bipartisan observer delegation noted
that, "This election was fair and honest,
and . . . provided a clear and undeniable
mandate to whichever candidate is
elected." Election observers from other
countries echoed a similar conclusion.

In protecting both rounds of the re-
cent elections, the Salvadoran Armed
Forces took more than 80 casualties,

demonstrating once again their deter-
mination to defend freedom. They acted
professionally and apolitically, and are
showing us now that they will respect
the popular electoral will. In contrast,
the guerrillas refused to participate in
the election and intensified the combat
before, during, and after the voting.

As El Salvador's voters had to brave
the intimidation of the guerrillas, their
newly elected President will have to face
the challenges of creating a peaceful and
secure framework for social and
humanitarian reform, economic develop-
ment, and further democratic advance.

The people of El Salvador have
spoken. We, along with other nations
committed to a democratic form of
government, must heed their courageous
action. We will support their newly
elected government in the pursuit of and
the opportunity for a better life.

I look forward to meeting with El
Salvador's new President-elect on Mon-
day, May 21, during his visit to
Washington. In addition, I have asked
Secretary of State George Shultz to
head our delegation to the President-
elect's inauguration on June 1 in San
Salvador.

■Text from Weekly Compilation of
Presidential Documents of May 21, 1984.

WESTERN HEMISPHERE

The protection and promotion of a strong
private sector, with opportunities for small,
medium and large entrepreneurs, is an in-
dispensable means of expanding wealth and
creating employment. Close collaboration be-
tween the public and private sectors will
enhance the revitalization of production, im-
provement in public health and education,
reintegration of displaced persons, and na-
tional construction. This collaboration is a
basis for stimulating domestic confidence, en-
suring access to international credit and at-
tracting new international investment.

The consolidation of democracy requires
social peace and the protection and improve-
ment of basic reforms begun in El Salvador
in the 1980's, including the finding of new
ways to stimulate production, ensure clear
titles to land, pay adequate compensation and
guarantee land reform beneficiaries per-
manence and tranquillity in their new owner-
ship.

Democracy cannot survive or thrive
without security. Military assistance and the
existence of a strong well-equipped national
armed force is essential to shield democratic
development. All governments have the
obligation to guarantee their peoples full
political participation and must have the
means to protect democratic institutions
against those who would subvert them, be
they Marxist guerrillas and their external
allies or violent internal extremist groups.

The two Presidents share the view that
the armed conflict in El Salvador must be
resolved through national reconciliation based
on the full integration of all its people into
the political processes of the country. This
participation should take place within the
democratic rule which establishes that the on-
ly success to power is in accordance with the
will of the people expressed through free
elections. They particularly welcome the ef-
forts to achieve regional peace undertaken
within the Contadora process and reaffirm
their full commitment to the principles of the
Contadora Document of Objectives.

The two Presidents reaffirm strongly
that abandonment of El Salvador and Central
America in the midst of a continuing armed
struggle serves neither the interests of their
two nations, nor those of the community of
free countries. They support the development
of strong democracies in all parts of Central
America, the democratic forces in Nicaragua,
and the objective of holding free, fair and
democratic elections in each of the countries
of the region. On the basis of common na-
tional interests and common belief in the
principles of democracy and freedom, they
pledge to work together toward peace with
security and toward human betterment with
freedom, for El Salvador and for all of Cen-
tral America.

To achieve these objectives, the two
Presidents have decided to maintain regular
and frequent contact to carry out these joint
principles, assuring that their relations are
guided by considerations of dignity, equality,
friendship and mutual respect.

Secretary Shultz Visits
El Salvador and Nicaragua

Secretary Shultz attended the in-
auguration of Jose Napoleon Duarte as
President of El Salvador on June 1,
198A, and on the same day went to
Nicaragua to meet with Comandante
Daniel Ortega.

Following are his remarks made
after the meeting. l

President Reagan sent me to Central
America on a mission of peace. I went
to El Salvador and witnessed the in-
auguration of the new President— an in-
spiring event. And I have come to
Nicaragua for a meeting with Coman-
dante Daniel Ortega, Foreign Minister
D'Escoto, and their colleagues.

Our discussions here were quiet,
direct, candid, and frank. Having met
last night with the foreign ministers of
eight of the nine Contadora countries,
and now here with the leaders of
Nicaragua, I have met with all of the
representatives of the Contadora coun-
tries.

Reflecting the discussions here, I
can say that we, as the other countries
involved, support the Contadora process
as the basic way to resolve regional
issues. During the discussions here, I ex-
pressed the U.S. concerns and sum-
marized them under four headings:

An end to the export of subver-

sion;

The restoration of a reasonable
military balance;

• The importance of removing Cen
tral America from the East- West con-
frontation by taking foreign advisers
that represent that confrontation out ol
the picture; and

• The importance of the implemen-
tation of the Sandinista statements to
the OAS [Organization of American
States] some years ago promising free
elections, political and democratic
pluralism, and concern for human rightr

After the presentation of the U.S. I
views and the views of Nicaragua, and !
some discussion, we agreed that furthei
discussions would take place. The Unita
States designated Ambassador Harry
Shlaudeman to represent us in these
discussions.

As I said earlier, both countries sup
port the Contadora process, represent-
ing as it does the fact that the problem!
and, therefore, the solutions to a con- j
siderable degree are regional in nature.
We expect that the discussions between
our two countries will make a contribu-
tion to the Contadora process. The
discussion here in Nicaragua has been i

'Text from Weekly Compilation of
Presidential Documents of May 28, 1984.

Secretary Shultz with Comandante Daniel Ortega (center) and Foreign Minister Miguel
D'Escoto.

Department of State Bulled

WESTERN HEMISPHERE

1 instructive one and the meeting was
orthwhile.

Q. Is the United States planning to
I ithdraw military advisers from Hon-

fras and El Salvador and cease sup-
rt to the "Contras"?

A. The points I made about U.S.
•oblems in the area represent a state-
ent of our views. Beyond that,
hatever may come up in the discus-
3ns between Ambassador Shlaudeman
id the Nicaraguan representative, we

discuss. Our plans are for discus-
dd.

Q. The United States has demands;
does the United States have any of-
fers?

A. I have given you a report on the
meeting and its content reflecting the
United States' views. Among the things
I reported is that there will be further
meetings and further discussions in
those meetings. The nature of those
discussions remains to be seen.

'■

'Press release 146 of June 7, 1984.

isit of Mexican President

President Miguel de la Madrid Hur-
do of the United Mexican States made
date visit to the United States May
-17, 1984, to meet with President
agan and other government officials.

Following are remarks made by the
o Presidents at the arrival ceremony
d toasts made at the state dinner on
vy 15, and remarks made to legislators
■ending the 2Uth annual meeting of the
rxico-U.S. Interparliamentary Con-
■ence on May 1 7. 1

IRIVAL CEREMONY,

I\Y 15, 19842

] esident Reagan

1 3 an honor and a pleasure for Nancy
I d me to welcome you and Mrs. De la
I idrid to Washington. We welcome you
| th the respect and admiration due to
B leader of a great nation. We
■lcome you also with the warmth and
od will with which one greets a friend.

A special relationship between the
esidents of our countries is becoming
mewhat of a tradition, and the rapport
' build as individuals is in keeping with
B finest sense of that valuable tradi-
n. Our ability to meet and, face to
:e, discuss the issues of the day,
nestly and without reservation, is
neficial to both our countries. The
last between us is something of great
| lue which should never be taken for
anted.

I well recall first making your ac-
aintance in June of 1981 at Camp
tvid. And the next time we met, you
jre President-elect of Mexico, and we
reed then, even before you were
rorn into office, to maintain a continu-
5 dialogue and to meet and confer

often. Your visit today builds upon the
professional and personal bonds about
which I'm speaking.

We have much to discuss. That is as
one would expect between the elected
leaders of two countries whose people,
by the millions, interact with each other
on a daily basis. Not only are our
destinies tied, but in ways too numerous
to count, our present as well.

We're fully aware of your commit-
ment to overcoming Mexico's current
economic difficulties. We applaud your
dedication and wish you success in your
drive to invigorate your economy and
better the lives of your people. Our sup-
port represents the best wishes of a
friend and more.

Mexico is now the third largest
trading partner of the United States.
We, on the other hand, are the world's
largest market for Mexican goods. The
prosperity and happiness of our peoples
are inexorably linked by these bonds of
commerce and friendship. I hope when
you return home that you will bring the
message to your citizens that the
American people are on your, the people
of Mexico's, side.

The United States and Mexico have
a common border and a common
American heritage as well. The people
of our countries — Spanish- and English-
speaking alike — represent the values
and culture of the New World, a bond
shared by 650 million Americans from
the North Slope of Alaska to the tip of
Tierra del Fuego. It behooves all of us
to work together to ensure the peace
and stability of our hemisphere.

That is especially true in regard to
Central America. I understand your
deep concerns about the turmoil plagu-
ing that region. We do not agree on
everything concerning this situation.

Yet, the level of respect in our relation-
ship remains high, and that is the way it
should be between neighbors who trust
each other.

Where we do disagree is not on
goals or principles. Instead, it is on the
means by which to achieve our goals.
The magnitude of our agreement, on the
other hand, is substantial and should not
be underestimated. Both the United
States and Mexico are motivated by a
love of liberty and independence in-
herent in our systems of government
and embedded in the souls of our people.

As you said in your book on con-
stitutional law while assessing
Rousseau's influence, "Liberty and
equality are values incompatible with
despotism, and mankind will not benefit
from them while there may be op-
pressors and oppressed." Our fundamen-
tal beliefs suggest that a lasting peace
for Central America must be based on
the principles of democracy, on economic
development that expands opportunity
for all people, on noninterventionism,
and on the avoidance of military
cooperation with communist and other
aggressor regimes.

We appreciate the creative and
energetic efforts to bring peace to the
region by the Contadora group, in which
Mexico has participated. The
Contadora's 21-point document of objec-
tives enunciates the goals we both sup-
port. We pray that the consensus that
produced the document of objectives can
translate what has already been done in-
to sound treaty provisions that can be
monitored, verified, and enforced on a
reciprocal basis.

For the United States, the con-
flagration in Central America appears
too close to ignore. Like a fire in one's
neighborhood, this threat should be of
concern to every nation in the
hemisphere. We can and should work
together to save lives and prevent fur-
ther destruction.

Complicating the situation and mak-
ing it even more dangerous has been the
intervention of a totalitarian coalition
which has undermined what we had
hoped would be a democratic revolution.
These totalitarians have been pouring
gasoline onto the fire by pumping
massive supplies of weapons into Cen-
tral America and encouraging tyranny
and aggression. Thousands of Cubans
and Soviet-bloc military personnel have
accompanied this flow of weapons and
equipment into the region.

Responsible governments of this
hemisphere cannot afford to close their
eyes to what is happening or to be lulled
by unrealistic optimism. I look forward

ily 1984

WESTERN HEMISPHERE

to discussing with you this issue of ut-
most importance.

President De la Madrid, earlier this
year, you visited Buenos Aires where
you said, "We do not want new conflicts
and wars in our vast territory. We need
peace and well-being. We do not want
martyrs from war-like confrontations.
We are civilian heroes." Well, I agree
with that sentiment completely.

Let me reaffirm today that the
United States will do what it can. It will
go the extra mile to find peaceful solu-
tions and to protect democracy and in-
dependence in the hemisphere.

Cooperation and respect between
the United States and Mexico will do
much in our efforts to promote peace
and improve the standard of living of
our people. As adversaries, our horizons
would be limited. As friends, equal in
each other's eyes and drawing from each
other's strength, a universe of oppor-
tunity awaits.

I speak for all the citizens of my
country when I say your friends
welcome you to the United States.

President De la Madrid3

I have come here to continue a personal
dialogue that we began in San Diego in
1982 and continued in La Paz in 1983.
Being constantly in touch has allowed us
to become better acquainted and, in our
friendly and honorable dealings, to meet
more effectively our responsibility to
solve the problems and overcome the
obstacles in the wide-ranging and com-
plex relations between our two coun-
tries.

It is with great pleasure that I
transmit through you warm greetings
from the people of Mexico to the great
people of the United States of America.
We Mexicans wish to continue building
not only peaceful and dignified neighbor-
ly relations but also a fruitful and
positive friendship. Our two countries
are reliable neighbors and friends, and
we know how to conduct our relations in
mutual respect for our independence and
our cultural and political concepts.

We have learned to solve our prob-
lems with serenity and realism. Two
peoples with different histories and
cultures with imbalances and disparities
have found the path of dialogue and
communication to be the basis for their
understanding. The wide range and
diversity of our bilateral relations
highlight our dialogue.

Our talks will cover trade and
tourism, financing and investment, the
very close relationship between our
border zones, and human and labor

aspects of the Mexican workers who
migrate to the United States, to name
only some of the most important topics.
Progress has been made in several of
these areas since the last time we spoke
to each other. In others, solutions are
pending, as will always be the case in
our dynamic relations. The important
thing is that we must continue to tackle
our problems frankly, and in good faith,
and that we, with imagination and deter-
mination, seek the best possible solu-
tions for the benefit of our countries.

I must acknowledge that I have
always found this to be your attitude
and that of your associates. Your
government has supported various finan-
cial programs for overcoming our
economic problems, and it has also been
willing to help surmount difficulties in
our trade relations. We must broaden
and enhance this open attitude to
dialogue and negotiations.

Our exchange of ideas goes beyond
solely bilateral matters. Both countries
are members of the international com-
munity, and we share responsibilities on
the American Continent. We are all con-
cerned about threats to peace, the prob-
lem of the arms race, and the severe
economic crisis that is hampering the ef-
forts of developing countries to pursue
their goal of economic and social prog-
ress in order to satisfy their people's
legitimate ambitions and to banish
hunger, unhealthy conditions, ignorance,
and poverty.

The United States and Mexico
should be concerned, as well, about the
specially serious difficulties that Latin
American countries are experiencing.
Peace has been disrupted in Central
America, and the risk of a generalized
war, the scope and duration of which no
one can foresee, is growing. Every coun-
try on the continent must do its utmost
to restore peace and avoid war by
respecting and upholding the sovereign
right of its people to decide their own
destiny and by rejecting interventionist
solutions of any kind.

In peacetime, we must also support
the Central Americans in their social
and economic development programs
and encourage their efforts to build
democracy and respect human rights. To
that end, let us apply the principles and
rules of international law established by
the countries of the American Conti-
nent: self-determination, noninterven-
tion, equality of states before the law,
peaceful solution of conflicts, and inter-
national cooperation for development.

Latin America is suffering the most
severe economic crisis of modern times.
Its peoples and governments have been

obliged to implement harsh economic
programs to cope with the situation. Wj
are correcting the internal imbalances i
that come under our responsibility, the j
reduction of fiscal deficits, and the im- J
balance in our commercial and financial
accounts with foreign countries. The
Mexican people are giving ample proof J
of their vigor and responsibility.

Nonetheless, our determined effort!
require international understanding ana
cooperation in the field of trade and
finance so that international conditions!
do not frustrate domestic actions. The I
crucial point is external debt servicing J
and the high and rising interest rates. 1
the short term, it is necessary to take I
effective action on the cost of money. I
The broadest and most far-reaching
solution is to recover our payment
capacity so that we can meet our debt '
obligations to regain our purchasing
power abroad, to renew the process of j
economic growth, and to generate
employment, thereby strengthening thei
basis of stability.

Solutions are not easy. It is we who
must make the basic effort. We have
already shown that we are both willing
and able to do so. Now we ask the inteti
national community and essentially thei
industrialized countries to accept that.
Since interdependence is an irreversible!
fact, the imperative of solidarity is a
duty based not only on ethics but also o
expedience.

I have no doubt that in a climate of'
frankness and friendship our talks will*
enhance our understanding of these
topics, and we will be able to find new
solutions to the problems that concern
us.

DINNER TOASTS.
MAY 15, 19844

President Reagan

Being here with so many friends from
Mexico, I can't help but take my
thoughts back to California. Tonight is
reminiscent of the gala evenings in old
California, the vineyards, the music, th
pride and accomplishments of the
Hispanic frontier men and women, in-
dividuals who conquered a wilderness,
but while doing so, maintained a
phenomenal level of dignity. All of this,
and more, reflects the character of a
people whose legacy is now shared by
the citizens of our two countries.

I'm not certain it goes back as far *
the hacienda days, but I would like to
extend to you a traditional greeting thai
I've adopted as my own, just as I

WESTERN HEMISPHERE

opted California. President and Mrs.

la Madrid, mi casa es su casa [my
use is your house].

Today, we've had frank and fulfilling
scussions. I hope you agree with me
at although we do not see eye to eye
everything, it is clear that we as in-
/iduals, and our two nations as well,
main solid in our friendship and
deterred in our trust.

The good will between us goes far
yond the transitory issues of the day.
ir people recognize that issues, even
ase that seem important at the mo-
ent, will someday pass from the scene,
hat will not change are the many gifts
d mandates given to us by God that
rve as the basis of our societies. I
n't believe that the Lord brought us to
s level of political, social, and
)nomic development, that He located

the Mexican and American
ople — in such proximity, and did not
end us to be friends.

In the last 50 years, when people of
'dering countries in so many parts of
s world were killing each other, or
re immersed in envy and hatred, the
itual respect and ever-increasing
>peration between our peoples and
/ernments shined in contrast.
Our trade and commerce is a power-
engine for economic progress for
h our countries. The cultural and
ial ties between our people enrich and
i diversity and flavor to our everyday
;s. Yet the cement with the strongest
ip is found in the ideals and values
it our people share.
President Thomas Jefferson, a man
important to the development of
h nan liberty, outlined in his first in-
a jural address some of the aspirations

0 our new republic. Although spoken

1 1 years ago, the words still ring true.
C r desire in foreign affairs, he said,
« s "equal and exact justice to all men,
a whatever state or persuasion,
r igious or political peace, commerce,
a 1 honest friendship with all

■ ;ions. . . ."

1 I heard an echo of these sentiments
1 1 August in La Paz when you said,
Nationalism, cultural identity, freedom,
d nocracy, economic development with
3 'ial justice, an independent foreign

0 icy, and defense of our territorial in-
■rrity are shared values embodied in

<J ■ national design and vital bonds that
li< us all."

1 If we can be guided by these prin-
i les with our shared values and in-

■ ests overshadowing momentary

I agreements, surely the good will be-
ll een us will endure, and our relation-

ship will continue to shine as an example
to others.

And now will all of you join me in a
toast to our honored guests — to Presi-
dent and Mrs. De la Madrid, to their
health and to the continued good will
between our two great nations.

President De la Madrid3

May my first words be to express my
gratitude for the kind courtesies that we
have received during our visit to
Washington today. Both during our
work meetings and today, during this
dinner, we have seen proofs of affec-
tionate and cordial friendship that both
my wife, myself, and the members of my
party appreciate very much.

This kind of a dialogue is also
always fruitful. It makes it possible for
us to compare our analysis and evalua-
tion, our perceptions of reality, to agree
on our similarities, and also to know our
differences.

Geography has influenced both of us.
It has led us to be neighbors, and it has
led us to be friends. Neighbors we are
because geography is as it is, but friends
is something that comes from our own
self. It is a quality of the human being.

Friends always seek to extend areas
of consensus and to make their dif-
ferences smaller, to seek formulas to
overcome the problems that come from
our close, complex, and very broad rela-
tionship. Friendship presupposes all of
this. There must be sincerity and
frankness, dignity and respect in our
dealings, careful examination of our
discrepancies and, above all, it demands
good will.

Differences of opinion are natural
and can be explained among human be-
ings. They can be explained among us.
Even though Mexico and the United
States have often traveled the same
road, even though they stem from the
same roots, there are differences in our
culture, and these differences have made
our sensibilities also different. It has
come to enrich the human race, because
it is variation which is needed for this
enrichment. It is not good for everyone
to be just the same.

In this way, Americans and Mex-
icans find themselves face to face with a
rich culture and a rich and profound
perception of our nationalities. But there
are not only differences between us.
Analogies are also evident.

Both nations have rooted their
political and social systems in the aspira-
tion to live in freedom, to permanently
build democracy, and to seek the equali-
ty of opportunity for all. Both nations

postulate respect for law and justice as a
norm for peaceful and dignified coex-
istence. And that which makes our two
countries similar is that we are not
societies that are frozen and opposed to
change. We are societies that are open
to change.

We who love freedom must be open
to change. We cannot freeze the human
spirit. And it is for this reason that we
are also obliged to be tolerant.

Our conversations have been
honorable and cordial. They reflect our
common purpose: to extend the areas in
which we agree and to reduce our dif-
ferences. But the road to travel is a long
one. The life of individuals has a limit,
but the life of nations does not have a
historical horizon.

The important thing about this
meeting is that we have renewed our
will to continue to travel that road as in-
dividuals, and as nations that are living
in good faith. As I said before, during
the luncheon that was kindly offered me
by Secretary Shultz, we know that you
want to have dignified, prosperous, and
strong neighbors.

It is very important that a powerful
nation such as the United States, which
is the most powerful nation of all, can
say to the other countries, "We have
neighbors who are dignified; they are
not slaves." I, therefore, express my
hope that this relationship with dignity
and cordiality that has been built by the
Americans and the Mexicans will always
be the common denominator of our rela-
tionship, that we shall always be capable
with talent and good will to continue to
strengthen our friendship to our mutual
benefit.

This is the thinking and the will of
the Mexican people. And I am certain
that there is this same thinking and this
same will in the United States. That is
why I express my wishes that the rela-
tions between Mexico and the United
States will always be vigorous, that they
may be strengthened by our will to
understanding, and because friendship
and cooperation is what will bring us
together.

I wish to ask you to join me in a
toast to the personal happiness of Presi-
dent Reagan and his charming wife,
Nancy, to the happiness and prosperity
of the American people, and to those
values which we cherish which are
freedom, democracy, and justice.

«ly 1984

TREATIES

REMARKS TO LEGISLATORS.
MAY 17, 19846

President Reagan

Welcome. I think it's a wonderful coin-
cidence that these meetings have coin-
cided and that we have an opportunity
together to welcome you here for your
own meetings.

President De la Madrid and myself
have just concluded our second meeting.
We've had good conversations, and we
both listened to what the other had to
say.

I believe that we both sharpened our
perceptions and, at the same time, know
we deepened our personal friendship.
And like good friends, we spoke openly
and with candor on those few issues on
which there might have been differences
between us. But let me hasten to say
that we found that the differences were
not with regard to our goals.

We both share a commitment to
democracy, to the greater economic
well-being and a secure peace in all the
Americas. Our differences, where there
were any, were only with regard to the
means of reaching the goals and objec-
tives that we share. And both our
delegations at the ministerial level
worked very hard and, I think, have
made great progress on a number of
bilateral issues.

And let me just say to all of you
here — and I think I'm really speaking
for what was the tone of our conversa-
tion— we must remember that we are all
in this Western Hemisphere. Our na-
tions were born of people that were
seeking the same things — freedom, bet-
ter life in this New World that was here
for our forefathers to discover. We've
been given great gifts, resources,
technology and, above all, that spirit of
freedom.

Early in my Administration I made
a trip down through Central America
and into South America and in all of
them said the same thing. There have
been misunderstandings between us in
the past, and maybe there's been an in-
sensitivity on the part of our own coun-
try, the United States. But what I
wanted to find out was, how could we all
meet as partners here in this Western
Hemisphere, recognizing that from the
tip of South America all the way to the
North Slope of Alaska, we are all
Americans. We are all related in a sense
that is not true in any other part of the
world — that when we cross a border
from one country into another, we still
have that common heritage.

And if we look at ourselves, 650
million people in North, Central, and

South America, and we look at the
potential of what we can achieve, we
cannot only be a great force for good
here in the Western Hemisphere, we can
be a great force for good in the entire
world.

President De la Madrid3

It is a great pleasure for me to be able
to greet you at the beginning of a new
interparliamentary meeting between the
United States and Mexico.

In accordance with our constitu-
tional norms are the relations, the for-
mal relations of our countries which are
formed through a very complex process
that is in the hands of the legislative and
the executive bodies. It is one of the
most serious responsibilities that this
Presidential system gives the heads of
the executive branch, both in the United
States and in Mexico. But there is no
doubt that the political process through
which the foreign policy is formed has as
one of its basic ingredients the opinions
of the Congresses and, particularly, of
the Senates.

That is why it is very promising that
this meeting among legislators is begin-
ning precisely when the meeting be-
tween the Presidents has just finished. I
agree with what my friend, President
Reagan, has said just a few minutes ago.
Our dialogue has progressed as it should
between good friends that work with
dignity. Both sides have been led by the
main guideline of our conversations,
which has been the interest of our
peoples, mutual respect, and, also,
respect for one another's truth.

As President Reagan has already
said, we have made progress during
these conversations. We have made
progress in coming to a better under-
standing of each other and also in keep-
ing each other better informed and
bringing about certain solutions to some
of our problems, problems which are
every day more complex and deeper be-
tween Mexico and the United States.

I have no doubt that the work that
you will be beginning today will be
another positive and constructive
episode. An exchange of points of view
within a framework of sincerity, of
respect, and of dignity will give each one
of our countries new elements of judg-
ment in order to continue to work
toward a stronger friendship and a rela-
tionship which is every day more cordial
and more sincere.

■Texts from Weekly Compilation of
Presidential Documents of May 21, 1984.

2Made on the South Lawn of the White
House, where President De la Madrid was ac-

corded a formal welcome with full military
honors.

3President De la Madrid spoke in
Spanish, and his remarks were translated by
an interpreter.

4Made in the State Dining Room of the
White House.

5Made in the East Room of the White
House. ■

Current Actions

MULTILATERAL

Antarctica

Antarctic treaty. Signed at Washington
Dec. 1, 1959. Entered into force June 23,
1961. TIAS 4780.
Accession deposited: Finland, May 15, 1984.

Aviation, Civil

Convention on offenses and certain other act |
committed on board aircraft. Done at Tokyo !
Sept. 14, 1963. Entered into force Dec. 4,
1969. TIAS 6768.

Accessions deposited: Bahrain,1 Feb. 9, 19841
Czechoslovakia,1 Feb. 23, 1984; Jamaica.
Sept. 16, 1983; St. Lucia, Oct. 31, 1983;
Tanzania, Aug. 12, 1983.

Convention for the suppression of unlawful I
acts against the safety of civil aviation. Dona
at Montreal Sept. 23, 1971. Entered into
force Jan. 26, 1973. TIAS 7570.
Accession deposited: Guinea, May 2, 1984; ]

Nauru, May 17, 1984.

Ratification deposited: Haiti, May 9, 1984.

Protocol relating to an amendment to the
convention on international civil aviation
(TIAS 1591). Done at Montreal Sept. 30,
1977.2

Ratifications deposited; Afghanistan,
Sept. 28, 1983; Algeria, Jan. 16, 1984;
Federal Republic of Germany, Feb. 15, 1984;
Italy, Oct. 13, 1983; Seychelles, Sept. 23,
1983; Sri Lanka, Jan. 30, 1984; Vietnam,
Sept. 20, 1983.

Protocol relating to an amendment to the
convention on international civil aviation
(TIAS 1591). Done at Montreal Oct. 6, 1980.'
Ratifications deposited: Belgium Sept. 23,
1983; Denmark, Dec. 22, 1983; Federal Re-
public of Germany, Oct. 19, 1983; Mali,
Jan. 11, 1984; Philippines, Jan. 31, 1984;
Seychelles, Sept. 23, 1983; Spain, July 11,
1983.

Coffee

International coffee agreement 1983, with an-
nexes. Done at London Sept. 16, 1982.
Entered into force provisionally Oct. 1, 1983.
Accessions deposited: Sierra Leone, Apr. 30,
1984; Zimbabwe, Mar. 5, 1984.
Ratifications deposited: Austria, Mar. 26,
1984; Finland, May 8, 1984; Haiti, Mar. 14,
1984; Mexico. Mar. 21, 1984; Portugal,
Mar. 30, 1984.

Department of State Bulletin

TREATIES

' nservation

( nvention on the conservation of Antarctic
I .rine living resources, with annex for an ar-
I ral tribunal. Done at Canberra May 20,

30. Entered into force Apr. 7, 1982. TIAS
' MO.
; tification deposited: Poland, Mar. 28, 1984.

ltural Property

itutes of the International Centre for the
idy of the Preservation and Restoration of
ltural Property. Adopted at New Delhi
v.-Dec. 1956, as amended at Rome
r. 24, 1963, and Apr. 14-17, 1969.
tered into force May 10, 1958; for the U.S.

20, 1971. TIAS 7038.
session deposited: Philippines, Dec. 15,

;::.

1 ucation— UNESCO

ivention on the recognition of studies,
lomas, and degrees concerning higher
i ication in the states belonging to the
rope region. Done at Paris Dec. 21, 1979.
tered into force Feb. 19, 1982.3
ification deposited: Sweden, Mar. 7, 1984.

rironmental Modification

ivention on the prohibition of military or
c er hostile use of environmental modifica-
t i techniques, with annex. Done at Geneva
I / 18, 1977. Entered into force Oct. 5,

8; for the U.S. Jan. 17, 1980. TIAS 9614.
t ession deposited: Sweden, Apr. 27, 1984.

G locide

C ivention on the prevention and punish-

it it of the crime of genocide. Adopted at

9 is Dec. 9, 1948. Entered into force

1. 12, 1951.3

J ession deposited: Maldives, Apr. 24, 1984.

H nan Rights

Ii 'rnational convenant on civil and political
r! its. Adopted at New York Dec. 16, 1966.
B ered into force Mar. 23, 1976.3
\ ession deposited: Zambia, Apr. 10, 1984.

Ii rnational convenant on economic, social,
3 cultural rights. Adopted at New York
0.16, 1966. Entered into force Jan. 3,

^■ession deposited: Zambia, Apr. 10, 1984.

I| 'rnational agreement on jute and jute

:M lucts, 1982, with annexes. Done at

(leva Oct. 1, 1982. Entered into force pro-

Jjnally Jan. 9, 1984.

Sessions deposited: Australia, Apr. 12,

■4; Pakistan, Apr. 13, 1984.

B ification deposited: Finland, May 8, 1984.

V)-ine Pollution

J vention on the prevention of marine
Jution by dumping of wastes and other
■per, with annexes. Done at London, Mex-
J Moscow, and Washington Dec. 29, 1972.
Jered into force Aug. 30, 1975. TIAS

Bification deposited: Italy,4 Apr. 30, 1984.

Nuclear Material— Physical Protection

Convention on the physical protection of
nuclear material, with annexes. Done at
Vienna Oct. 26, 1979.2
Ratification deposited: Bulgaria,1 Apr. 10,
1984; Hungary,1 May 4, 1984.

Postal

Constitution of the Universal Postal Union.
Done at Vienna July 10, 1964. Entered into
force Jan. 1, 1966. TIAS 5881.
Accession deposited: Solomon Islands,
Mar. 12, 1984.

Additional protocol to the Constitution of the
Universal Postal Union. Done at Tokyo
Nov. 14, 1969. Entered into force July 1,
1971, except for Art. V which entered into
force Jan. 1, 1971. TIAS 7150.
Accession deposited: Solomon Islands,
Mar. 12, 1984.
Ratification deposited: Malawi, Jan. 27, 1984.

Second additional protocol to the Constitution

of the Universal Postal Union. Done at

Lausanne July 5, 1974. Entered into force

Jan. 1, 1976. TIAS 8231.

Accession deposited: Solomon Islands,

Mar. 12, 1984.

Ratification deposited: Malawi, Jan. 27, 1984.

General regulations of the Universal Postal
Union, with final protocol and annex, and the
universal postal convention, with final pro-
tocol and detailed regulations. Done at Rio de
Janeiro Oct. 26, 1979. Entered into force
July 1, 1981; except for Art. 124 of the
general regulations which became effective
Jan. 1, 1981. TIAS 9972.
Accessions deposited: Albania, Apr. 12, 1984;
Solomon Islands, Mar. 12, 1984. '
Ratifications deposited: Liberia, Feb. 23,
1984; Malawi, Jan. 27, 1984; Mexico, Mar. 1,
1984; Tanzania, Dec. 12, 1983.

Money orders and postal travelers' checks
agreement, with detailed regulations with
final protocol. Done at Rio de Janiero
Oct. 26, 1979. Entered into force July 1,
1981. TIAS 9973.
Ratification deposited: Mexico, Mar. 1, 1984.

Property — Industrial

Convention of Paris for the protection of in-
dustrial property of Mar. 20, 1883, as re-
vised. Done at Stockholm July 14, 1967.
Entered into force Apr. 26, 1970; for the
U.S. Sept. 5, 1970, except for Arts. 1-12
which entered into force May 19, 1970; for
the U.S. Aug. 25, 1973. TIAS 6923, 7727.
Notification of accession: New Zealand,5
Mar. 20, 1984.

Property — Intellectual

Convention establishing the World Intellec-
tual Property Organization. Done at
Stockholm July 14, 1967. Entered into force
Apr. 26, 1970; for the U.S. Aug. 25, 1970.
TIAS 6932.
Accessions deposited: New Zealand,6 Mar. 14,

1984; Rwanda, Nov. 3, 1983.

Racial Discrimination

International convention on the elimination of
all forms of racial discrimination. Adopted at
New York Dec. 21, 1965. Entered into force
Jan. 4, 1969.3
Accession deposited: Maldives, Apr. 24, 1984.

UNIDO

Constitution of the United Nations Industrial
Development Organization, with annexes.
Adopted at Vienna Apr. 8, 1979.2
Ratification deposited: Equatorial Guinea,

May 4, 1984.

Wheat

1983 protocol for the further extension of the
wheat trade convention, 1971 (TIAS 7144).
Done at Washington Apr. 4, 1983. Entered
into force July 1, 1983.
Ratification deposited: Switzerland,
May 24, 1984.

Women

Convention on the elimination of all forms of
discrimination against women. Adopted at
New York Dec. 18, 1979. Entered into force
Sept. 3. 1984.3
Signature: Nigeria, Apr. 23, 1984.

BILATERAL

Bolivia

Agreement amending the agreement of
May 31, 1978, (TIAS 9518) for sales of
agricultural commodities. Effected by ex-
change of notes at La Paz Apr. 13, 1984.
Entered into force Apr. 13, 1984.

Bulgaria

Agreement concerning fisheries off the coasts
of the United States, with annexes. Signed at
Washington Sept. 22, 1983.
Entered into force: Apr. 12, 1984.

Canada

Agreement for cooperation in severe
(nuclear) accident research. Signed at
Washington and Ottawa Mar. 2 and 16, 1984.
Entered into force Mar. 16, 1984; effective
Feb. 10, 1984.

Chile

Investment incentive agreement. Effective by
exchange of notes at Santiago Sept. 22, 1983.
Entered into force: Feb. 14, 1984.
Supersedes: Agreement of July 29, 1960.

Cook Islands

Investment incentive agreement. Effected by
exchange of notes at Wellington and
Rarotonga Sept. 2 and Oct. 10, 1983.
Entered into force: Apr. 16, 1984.

Czechoslovakia

Agreement amending and extending the air
transport agreement of Feb. 28, 1969, as
amended and extended (TIAS 6644, 7356,
7881, 8868), with annex. Effected by ex-
change of notes at Washington Dec. 19 and
23, 1983. Entered into force Dec. 23, 1983.

by 1984

CHRONOLOGY

Ecuador

Agreement regarding the consolidation and
rescheduling of debts owed to, guaranteed
by, or insured by the U.S. Government and
its agencies, with annexes. Signed at Quito
Mar. 19, 1984. Entered into force May 4,
1984.

El Salvador

Memorandum of understanding covering
cooperative investigations in earthquake
research. Signed at Reston and San Salvador
Apr. 16 and 24, 1984. Entered into force
Apr. 24, 1984.

France

Technical exchange and cooperation arrange-
ment in the field of safety of radioactive
waste management. Signed at Washington
and Paris Jan. 3 and 10, 1984. Entered into
force Jan. 10, 1984.

Haiti

Agreement relating to trade in cotton, wool,
and manmade fiber textiles and textile prod-
ucts, with annexes. Effected by exchange of
notes at Port-au-Prince Feb. 17 and May 4,
1984. Entered into force May 4, 1984; effec-
tive Jan. 1, 1984.

Arrangement amending the agreement of
Mar. 25 and Apr. 1, 1982, as amended (TIAS
10749), relating to trade in cotton, wool, and
manmade fiber textiles and textile products.
Effected by exchange of notes at Port-au-
Prince Feb. 17, and May 3, 1984. Entered in-
to force May 3, 1984; effective Dec. 31, 1983.

Italy

Supplemental agreement to the agreement of
May 23, 1973 on the matter of social securi-
ty. Signed at Rome Apr. 17, 1984. Enters in-
to force on the first day of the month follow-
ing the month in which the contracting states
shall have notified each other of the fulfill-
ment of the procedures required by their
respective internal rules for entry into force.

Jamaica

Agreement concerning conversion and remit-
tance of Jamaican dollar earnings by U.S.
airlines. Effected by exchange of notes at
Kingston Mar. 22 and 30, 1984. Entered into
force Mar. 30, 1984.

Mexico

Agreement regarding the consolidation and
rescheduling of certain debts owed to,
guaranteed, or insured by the United States
through the Export-Import Bank of the
United States. Signed at Mexico Mar. 7,
1984. Entered into force May 2, 1984.

Norway

Agreement on social security, with final pro-
tocol and administrative agreement. Signed
at Washington Jan. 13, 1983.
Entered into force: July 1, 1984.

Peru

Agreement for the sales of agricultural com
modities. Signed at Lima May 1 1, 1984.
Entered into force May 11, 1984.

Poland

Agreement extending the agreement of
Aug. 2, 1976 concerning fisheries off the
coasts of the United States (TIAS 8524). Ef-
fected by exchange of notes at Washington
and Warsaw Mar. 7 and 30, 1984. Enters in-
to force following written notification of the
completion of internal procedures of both
governments.

Portugal

Agreement concerning the installation in Por-
tugal of a ground-based, electro-optical deep
space surveillance (GEODSS) station. Ef-
fected by exchange of notes at Lisbon
Mar. 27, 1984. Entered into force Mar. 27,
1984.

Senegal

Agreement amending the agreement of
May 16, 1980, (TIAS 10239) for sales of
agricultural commodities. Effected by ex-
change of letters at Dakar Mar. 22 and
Apr. 3, 1984. Entered into force Apr. 3,
1984.

Sierra Leone

Agreement for the sale of agricultural com-
modities relating to the agreement of
Aug. 31, 1978 (TIAS 9210). Signed at
Freetown Feb. 23, 1984. Entered into force
Feb. 23, 1984.

Singapore

Agreement amending the agreement of
Aug. 21, 1981, as amended, relating to trade
in cotton, wool, and manmade fiber textiles
and textile products, with annexes. Effected
by exchange of notes at Washington
May 17-18, 1984. Entered into force
May 18. 1984.

Thailand

Agreement on cooperation in science and
technology. Signed at Washington Apr. 13,
1984. Entered into force Apr. 13, 1984.

USSR

Agreement extending the agreement of
Nov. 26, 1976, as amended (TIAS 8528,
10531) concerning fisheries off the coasts of
the United States. Effected by exchange of
notes at Washington Feb. 28 and Apr. 11,
1984. Enters into force following written
notification of the completion of internal pro-
cedures of both governments.

Uruguay

Agreement concerning exports of certain tex-
tile products manufactured in Uruguay to the
United States, with annexes. Effected by ex-
change of notes at Montevideo Dec. 30, 1983,
and Jan. 23, 1984. Entered into force
Jan. 23, 1984; effective Aug. 1, 1983.

Yugoslavia

Agreement extending the memorandum of
understandings, as effected by the agreement
of Mar. 17 and May 19, 1982, as amended
and extended (TIAS 10450, 10676). relating
to air transport and nonscheduled air serv-
ices. Effected by exchange of notes at
Belgrade Mar. 23 and 30, 1984. Entered into
force Mar. 30, 1984.

Zaire

Agreement for technical assistance for the
maintenance of the extra high voltage DC
tertie Inga-Shaba project. Signed at Kinsh
Apr. 14, 1984. Entered into force Apr. 14,
1984.

'With reservation(s).
2Not in force.

3Not in force for the United States.
4With statement.

Applicable to Cook Islands, Niue, and
Tokelau. ■

May 1984

May 1-2

Secretary Shultz visits South Korea and
Japan.

May 1

Acting State Department spokesman
Romberg reiterates the Administration's
belief that the Contadora process offers the
best hope for a comprehensive, verifiable
peace in Central America.

Acting State Department spokesman
Romberg says a major Soviet offensive is
continuing in Afghanistan's Panjsher Valley
and that reports that the entire valley has j
been secured are "not accurate."

In a report to the Congress on the
technology transfer control program, Defena
Secretary Weinberger says that 135 Soviets!
were expelled from 21 countries in 1983,
most for suspected military-related industrial
espionage.

May 2

President Reagan and His Holiness Pope
John Paul II meet in Fairbanks. The Presi-
dent is returning from China, and the Pope||
en route to Asia.

Lebanese Cabinet meets for the first
time. Three of the 10 Cabinet members do ,
not attend.

May 3

Acting State Department spokesman
Romberg describes two recent border attacH
by Nicaragua into Costa Rica as "the latest il
a series of territorial violations going back at
least 2 years."

May 4

During a visit to Moscow, Polish leader Geiu
Jaruzelski and Soviet President Chernenko I
sign a 15-year economic pact.

May 5

In an address before the South Carolina Bar
Association in Columbia, Secretary Shultz
says that efforts to force allies to abide by
U.S. sanctions and jurisdiction were causing
disputes that threaten "the moral foundation
to our common defense." To resolve dif-
ferences, he offers a four-point approach:

• Use diplomacy to harmonize policies;

• When diplomacy fails, the U.S. should
apply sanctions only after trying to take
foreign interests into account;

Department of State Bulletin

CHRONOLOGY

I • Develop procedures to assure that
,« ier agencies consult the State Department
jj en contemplating actions that may touch

Jeign sensitivities about conflicts of
isdiction; and

i» Discuss procedures with individual
ntries and international organizations,
ough the OECD and the UN, for ensuring
/ance consultation.

iy 6

Salvadorans vote in the run-off presiden-

election. The two candidates are Jose
poleon Duarte (Christian Democratic Par-
and Roberto d'Aubuisson (Nationalist
publican Alliance).

Panama holds its first direct presidential
:tion in 16 years. The two main candidates

Dr. Arnulfo Arias Madrid (Opposition
mocratic Alliance) and Nicholas Ardito

letta Vallarino (National Democratic
ion).

Ecuador holds a presidential election. The
i candidates are Rodrigo Borja Cevallos
mocratic Left Party) and Leon Febres
■dero Rivadeneira (National Reconstruc-
1 Front).

y 7-10

sident Quett K. J. Masire of Botswana

res an official visit to Washington, D.C.

5 7 7-18

0 holds its annual assembly in Geneva.

? '7

ing State Department spokesman

iberg says Costa Rica has asked the U.S.

immediate U.S. military assistance to deal

i "the mounting level of Nicaraguan-

ated border incidents." The U.S. is

lered in this request, he says, because the

1984 appropriation of $2.15 million has

i earmarked and the FY 1984 supplemen-

■equest of $7.85 million has not been

d upon by the Congress and, therefore, is

yet available to assist Costa Rica.

An American Presbyterian minister, Rev.

jamin Weir, is kidnapped outside his

e in Beirut.

West German Foreign Minister Genscher

ts with President Reagan and Secretary

ltz.

8-20

President Bush visits Japan (May 8-10),
>nesia (May 10-12), India (May 12-15),
istan (May 15-18), and Oman
y 18-20).

8
emarks before the Council of the
ericas Conference, Secretary Shultz says

"over 90% of the people living in Latin

rica live under conditions of democracy
ery rapid movements toward democracy"

that "this is something that we must

jetuate."

The second round of the CDE convenes

tockholm.

Soviet National Olympic Committee an-
nounces that Soviet athletes will not par-
ticipate in the Summer Olympic Games to be
held in Los Angeles. In its official
statements, the committee voices "serious
concern over the rude violations by the
organizers of the games of the rules of the
Olympic Charter and the anti-Soviet cam-
paign launched by reactionary circles in the
United States with the connivance of the of-
ficial authorities." White House spokesman
says that the U.S. has "made exhaustive ef-
forts to meet Soviet concerns about ar-
rangements in Los Angeles" and that the
Soviets "have disregarded the feelings of
most nations and millions of people the world
over that the Olympics will be conducted in a
nonpolitical atmosphere. State Department
spokesman Hughes describes the Soviet deci-
sion as "a blatant political action for which
there is no real justification."

State Department spokesman Hughes ex-
presses U.S. concern about reports that
Soviet human rights activists and Nobel
laureate Andrei Sakharov has been on a
hunger strike since May 2 and that his wife,
Elena Bonner, has been charged with
slandering the Soviet state. Hughes says "the
refusal of Soviet authorities to reveal any in-
formation about the present welfare and
whereabouts of the Sakharovs lends credence
to these reports." Sakharov went on the
hunger strike to demand medical treatment
for his wife abroad; Soviet authorities have
prevented her from leaving the closed city of
Gorky.

May 9

In a televised address to the nation. Presi-
dent Reagan appeals to Congress to approve
his military and economic assistance package
for Central America. He says that the com-
munists will likely succeed in toppling the El
Salvador Government if Congress rejects the
aid.

State Department spokesman Hughes
lists U.S. efforts to reassure the Soviets con-
cerning their security at the Summer Olym-
pics:

• Authorized a Soviet request for at least
25 Aeroflot charter flights;

• Assured the Soviets privately and in
writing that all Olympic participants would
be able to enter the U.S. on the basis of their
Olympic identity cards without visas;

• Authorized a month-long port call for a
Soviet cruise ship that would serve as the
Soviet's Olympic headquarters;

• Assured the Soviets privately that
after an initial customs and safety inspection,
subsequent searches of the ship would be
only for cause;

• Authorized advance entry into the U.S.
of Aeroflot and shipping personnel;

• Indicated its willingness to receive an
Olympic attache with full diplomatic status
(but not the person originally proposed);

• Informed Soviet officials they would be
permitted to rent vehicles (normally pro-
hibited) during the Olympics;

• Told the Soviets publicly and privately
that emigre groups organizing demonstra-
tions or planning to incite defections had no
U.S. Government sanction whatsoever;

• Opened all areas containing Olympic
sites, hotels, and airports to Soviet travel
from June 1 to Aug. 15;

• Undertook full responsibility for securi-
ty of the Soviet ship; and

• Assured the Soviets privately that
every possible security precaution for the
games was being taken.

Bulgaria withdraws from participation in
the Summer Olympics.

An organization in Lebanon, calling itself
the Islamic Jihad, claims responsibility for ab-
ducting American clergyman Benjamin Weir
May 7 and for holding two other
Americans — U.S. Embassy official William
Buckley and Cable News Network bureau
chief Jeremy Levin.

In a proclamation designating July 20 as
National POW/MIA Recognition Day, Presi-
dent Reagan calls on the nation to honor and
remember "those who have served their coun-
try so faithfully" and to "recognize the special
debt all Americans owe to our fellow citizens
who gave up their freedom in the service of
our country and to the families who have
undergone a great travail."

May 10

By a vote of 212 to 208, the House of
Representatives approves authorization bill
funding President Reagan's package for Cen-
tral America implementing the FY 1984 and
FY 1985 economic and military assistance
levels recommended by the National Bipar-
tisan Commission on Central America.

In an interim decision, the World Court
calls for cessation of mining of Nicaraguan
harbors and of any support of military or
paramilitary activities in violation of interna-
tional law. State Department spokesman
Hughes says the U.S. "respects the Court
and the rule of law and intends to act accord-
ingly." He points out that the Court has not
ruled on its jurisdiction in this case and that
the U.S. will push for a quick decision on this
issue.

A Sri Lankan separatist group kidnaps an
American couple from their home in Jaffna
and demands that the Sri Lanka Government
release 20 jailed rebels and pay $2 million in
gold to an Indian state or the couple will be
killed.

East Germany withdraws from participa-
tion in the Summer Olympics.

May 11-12

Representatives of 14 industrial and develop-
ing nations meet in Washington to discuss
trade and finance.

May 11

The Central Elections Council officially
declares Jose Napoleon Duarte to be the win-
ner of El Salvador's presidential run-off elec-
tion. He received almost 54% of the vote.
Vietnam and Laos withdraw from par-
ticipation in the Summer Olympics.

May 12

Czechoslovakia and Mongolia withdraw from
participation in the Summer Olympics.

Sri Lanka President Jayewardene says
his country will not pay ransom to the kid-
nappers of the American couple.

CHRONOLOGY

May 13

Afghanistan withdraws from participation in
the Summer Olympics.

Talks are held under Zambian auspices
among SWAPO, the Namibian Multi-Party
Conference, and the South African Ad-
ministrator General of Namibia.

May 14-17

President Miguel de la Madrid Hurtado of
Mexico makes a state visit to the U.S.

May 14-31

Ambassador to the UN Kirkpatrick visits
China, Malaysia, Thailand, Singapore, and
the Philippines.

May 14

President Reagan says the U.S. will
withdraw one additional nuclear weapon from
Europe for each Pershing II and cruise
missile it deploys. He also appeals to the
House of Representatives to approve funds
for the MX program.

In an address before the League of
Women Voters in Detroit, Secretary Shultz
says the U.S. remains committed to arms
control but emphasized "that commitment is
not based on naivete or wishful thinking."

Soviet news agency TASS announces that
the Soviet Union will place more missiles on
East German territory in response to the
NATO deployments in Western Europe.

Elections are held for 183 contested seats
in the Philippine National Assembly. Govern-
ment party wins about two-thirds of the
seats; opposition parties about one-third.

May 15

State Department spokesman Hughes says
"there is no justification whatsoever for any
Soviet counterdeployments [in Eastern
Europe] in view of their current nuclear and
conventional advantages."

White House spokesman Speakes says
the U.S. has seen reports that Iran has joined
Iraq in attacking ships in the Persian Gulf,
presumably as part of its stated intention of
closing the gulf to shipping if Iraq used
sophisticated missiles against ships. He says,
"We feel strongly that the Persian Gulf
should remain open for shipping and we have
made strong representations to both govern-
ments in the past." State Department
spokesman Hughes says the recent attacks
"represent a dangerous escalation of the Iran-
Iraq war and a growing threat to freedom of
navigation in the gulf."

ACDA releases its annual report, World
Military Expenditures and Arms Transfers.
It shows that the Soviet Union is still the
leading arms supplier in the world, providing
37% of the total transfers to developing coun-
tries.

Nicaragua and Costa Rica sign an agree-
ment aimed at lessening tensions and armed
conflict along their joint border.

Sri Lankan separatists release unharmed
the American couple they abducted May 10.

May 16

White House spokesman Speakes says the
U.S. is determined to keep the Persian Gulf
open to shipping and "will do what is
necessary" to accomplish that end. State
Department spokesman Hughes confirms that
U.S. AWACS aircraft are providing aerial
surveillance data to the Saudi Air Force to
enhance its air defense capability.

Department spokesman Hughes indicates
the Costa Rican request for military
assistance to deal with Nicaraguan border in-
cidents can be accommodated under the Ad-
ministration's existing FY 1984 military
assistance program supplemental request.

Hungary withdraws from participation in
the Summer Olympics.

May 17-18

OECD's annual ministerial meeting is held in
Paris. Commerce Secretary Baldrige leads
the U.S. delegation.

May 17

Foreign Ministers of the members of the Gulf
Cooperation Council (GCC) — Bahrain,
Kuwait, Oman, Qatar, Saudi Arabia, and the
United Arab Emirates — meet to discuss at-
tacks on Arab oil tankers in the Persian Gulf.
This emergency session comes in the wake of
a May 16 attack on a Saudi tanker by a plane
the U.S. believes was Iranian and attacks on
two Kuwaiti tankers earlier in the week by
warplanes which Kuwait claims came from
Iran. In a declaration the GCC reaffirms the
principle of collective security and its deter-
mination to deal jointly with security threats.

White House spokesman Speakes says
there has been no specific U.S. offer of direct
military support made to the Persian Gulf
countries nor has any been requested by
those countries.

Libya's official news agency announces
that suicide squads have been formed to wipe
out foes of Libyan leader Qadhafi.

Poland withdraws from participation in
the Summer Olympics.

May 18

State Department spokesman Hughes con-
demns Libya's announced intention to use
suicide squads to assassinate foes of Libyan
leader Qadhafi as "another indication that
Qadhafi is prepared to use terrorism as an in-
strument of Libyan policy."

Donald Rumsfeld resigns his position as
the President's special envoy to the Middle
East.

May 19-23

President-elect Jose Napoleon Duarte of El
Salvador visits Washington, D.C.

May 19

State Department confirms that a
Panamanian-registered cargo vessel sank in
the Persian Gulf after being attacked by Iraqi
jets May 18.

Lebanese Cabinet approves a ministerial
policy statement concerning the future of
Lebanon.

Group of 10 ministers and their deputies
meet in Rome. The deputies report on prog- .
ress made thus far in refining the interna- i
tional monetary system.

May 20

Foreign Ministers of the 21-member Arab
League, meeting in Tunis, issue a resolutionl
accusing Iran of aggression in its war again!
Iraq and in connection with attacks against I
ships in international sealanes and in ter-
ritorial waters in the Persian Gulf. It is
estimated that about 20 ships have been at- j
tacked since January.

Soviet Defense Minister Ustinov says til
Soviet Union has increased the number of I
missile-carrying submarines off the U.S.
coasts.

May 21

GCC announces it will ask the UN Security
Council to give urgent attention to threats A
international shipping in the Persian Gulf

President Reagan sends a letter to Saua
King Fahd.

In remarks made during the visit to
Moscow of West German Foreign Minister j
Genscher, Soviet Foreign Minister Gromykd
says the Soviet Union will stay away from
the arms control talks until the U.S. remove
its nuclear missiles from Western Europe. 1

Acting State Department spokesman
Romberg says the deployment of Soviet
missile-carrying submarines off the U.S.
coasts is not new and represents no signifi-
cant change in the strategic situation.

Acting State Department spokesman
Romberg says the U.S. does not have in-
dependent confirmation of reports that An-
drei Sakharov has been moved to a hospitalj
nor does the U.S. have information regardii
the whereabouts or health of Mrs. Sakharov

Mav 22-24

U.S.-U.S.S.R. Trade and Economic Counej
meets in New York.

May 22

In his opening statement at a news con-
ference. President Reagan asserts that with
proper U.S. assistance, El Salvador and othe
nations in Central America can resist com-
munist subversion and develop their
democratic institutions in prosperity. He ate1
says the U.S. is consulting with its allies rc.i
cerning the security situation in the Persian
Gulf but says the possibility of direct in-
tervention is very slight.

State Department spokesman Hughes
says the U.S. seeks a diplomatic solution to
the fighting in the Persian Gulf between Ira
and Iraq, and he repeats that Saudi Arabia
has not made a request for U.S. military
assistance.

Greek Prime Minister Papandreou says
U.S. nuclear warheads stockpiled in Greece
are a provocation and are there without an
official agreement between the two govern-
ments.

Department of State Bulletii

:.■

PRESS RELEASES

UNESCO Director General M'Bow says
ij e U.S. decision to withdraw from UNESCO
the end of 1984 may not exempt it from
.ying its share of the 1985 budget and sug-
sts this might be a matter for the ICJ. U.S.
tibassador to UNESCO Gerard says the
S. position that it will owe nothing further
lowing its actual withdrawal is based on a
und legal rationale.

ly 23-24

y IEA countries, plus France, meet out-
e Paris to discuss further refining IEA
rtingeney plans to meet any future disrup-
ns of oil flows. The focus of the meeting is
ways to build existing oil stocks and on

potential for a coordinated stock draw in

event of emergency.

ly 23

ite Department spokesman Hughes says
• U.S. is actively considering selling
nger missiles to Saudi Arabia and has been
:ontact with congressional leadership on
5 subject.

President Hussein says Iraqi forces will
itinue an air and naval blockage of Iran's
*est oil terminal at Kharg Island.

Cuba withdraws from participation in the
nmer Olympics.

Jury convenes in final stage of 2V2-year
il of five Salvadoran former national
:rdsmen charged in the killing of four

erican churchwomen in 1980.

U.S. and Japan reach agreement on a
ft accord to open Japanese capital
-kets and internationalize the yen, thus
■ring that currency more available for in-
rational use as payment for traded goods

as a reserve.

I y 24

^i planes attack ships leaving Kharg
nd. Iran retaliates by attacking an oil
ti ker off the Saudi coast.
I By a vote of 267 to 154, the House of
fi iresentatives approves $61.75 million in
I 1984 emergency supplemental aid for El
3 /ador.

I By a vote of 241 to 177, the House of
1 iresentatives rejects further FY 1984

1 rgency supplemental financing for

N iraguan rebel groups. The legislation now

if s back to the Senate.

1 Jury convicts five Salvadorans on charges

<l .ggravated homicide in the 1980 deaths of

A • American churchwomen.

j At the MBFR talks in Vienna, the War-
m Pact turns down the Apr. 19 NATO pro-
nal on the way of counting troops in central
■ •ope.

I UNESCO's executive board appoints a
1] nember special committee to draw up pro-
Jals for changing the way the agency func-

lv 25

(I Security Council begins debate on attacks
ainst ships in the Persian Gulf.
f Iraq claims its forces destroyed eight
fj is in a convoy in the Persian Gulf; there is
ri ndependent confirmation.

May 26

South Yemen withdraws from participation in
the Summer Olympics.

May 27

Egypt holds elections for 448 contested seats
in its parliament.

May 28

Assistant Secretary Crocker meets with
Angolan Interior Minister Rodriques in
Lusaka.

Nicolas Ardito Barletta Vallarino receives
credentials as President-elect of Panama.

May 29-31

The regular semiannual NATO ministerial
session is held in Washington, D.C. At the
opening meeting, Vice President Bush tells
the NATO Foreign Ministers that four issues
challenging the alliance are to:

• Get Moscow to join in an improved
relationship with the West;

• Preserve the basic values of western
civilization;

• Make certain that freedom and in-
dependence in the Third World are not
destroyed by aggression and subversion; and

• Strengthen NATO's common security,
with particular emphasis on conventional
defenses.

At the conclusion of the ministerial, a
final communique and a Washington State-
ment on East-West Relations are issued.

May 29

President Reagan signs authorization for 200
Stinger launchers and missiles, 200 additional
missile reloads, and a KC-10 tanker to be
sent to Saudi Arabia because of "a grave con-
cern with the growing escalation" in the Per-
sian Gulf conflict. The President exercises his
authority for this sale under Section 36(b) of
the Arms Export Control Act to waive the
normal 30-day waiting period following con-
gressional notification.

According to official results, Egyptian
President Mubarak's National Democratic
Party wins 390 of the 448 contested seats in
the parliamentary election, based on 73% of
the popular vote nationwide.

Treasury Secretary Regan announces
that the U.S. and Japan have agreed that
Japan will ease restrictions on the interna-
tional use of the yen and on foreign participa-
tion in its domestic financial markets. He
says the Japanese actions will have positive
effects on "the U.S. economy, the Japanese
economy, and the world economy."

May 30

Iraq claims to have hit another ship near
Iran's principal oil terminal at Kharg Island;
the claim cannot be confirmed.

State Department spokesman Hughes
confirms that U.S. Consul in Leningrad
Ronald Harms was beaten on Apr. 17 by a
group of young men and that the U.S. im-
mediately lodged a strong protest with the
Soviet Government.

State Department spokesman Hughes
says the U.S. has no new information to con-
firm a TASS report that Andrei Sakharov is
"doing just fine." He adds that a relative of
Dr. Sakharov in Western Europe doubts the
report.

May 31

Iraq threatens to destroy Kharg Island if
Iran launches a new ground offensive or
refuses to negotiate an end to the war.

Defense Department spokesman Burch
says the U.S. is reviewing an informal re-
quest by Kuwait on the availability and
delivery of Stinger antiaircraft missiles.

Lebanese Prime Minister Karami submits
to the parliament for approval the Cabinet
program for modifying the country's political
structure and ending the civil war. He also
asks for special powers to rule by decree for
9 months.

President Reagan signs a waiver extend-
ing for another year MFN treatment for
China, Hungary, and Romania. ■

Department of State

Press releases may be obtained from the Of-
fice of Press Relations, Department of State,
Washington, D.C. 20520.

No. Date Subject

"121 5/4 Program for the working

visit of President Quett K.
J. Masire of the Republic
of Botswana, May 7-10.

122 5/4 Shultz: toast at dinner hosted

by Korean Foreign
Minister Lee, Seoul,
May 1.

123 5/7 Shultz: address before the

South Carolina Bar
Association, Columbia,
May 5.

* 124 5/7 Shultz: interview on "This

Week With David
Brinkley," Apr. 29.

*125 5/8 Shultz: remarks before the
XV Washington Con-
ference for Corporate Ex-
ecutives.
126 5/8 Shultz: remarks at Foreign
Service Day memorial
dedication ceremony,
May 7.

*127 5/11 Program for the state visit
of President Miguel de la
Madrid Hurtado of Mexico,
May 14-17.

*128 5/11 Shultz: press briefing at Jing
Jiang Hotel, Shanghai,
Apr. 30.

129 5/11 Shultz: remarks before the

Business Council, Hot
Springs, Va., May 12.

130 5/14 Shultz: address and question-

and-answer session before
the American Society of
Newspaper Editors,
May 11.

Sy 1984

PUBLICATIONS

'131 5/21 Shultz: remarks at the

American Legion ceremony
honoring U.S. Marine
Security Guards, May 11.
132 5/14 Shultz: address before the
League of Women Voters,
Detroit.

•133 5/15 Dr. S. L. Abbott sworn in as
Ambassador to Lesotho
(biographic data).

*134 5/16 Shipping Coordinating Com-
mittee (SCC), Subcommit-
tee on UNCTAD, June 26.

♦135 5/16 SCC, Committee on Ocean
Dumping, June 1.

*136 5/17 Regional foreign policy con-
ference, St. Louis, May 24.

*137 5/24 Robert T. Hennemeyer

sworn in as Ambassador to
the Republic of The Gam-
bia (biographic data),
May 22.

"138 5/25 Department of State Ad-
visory Committee on
Oceans and International
Environmental and Scien-
tific Affairs, June 21.

*139 5/24 Advisory Committee on In-
ternational Investment,
Technology, and Develop-
ment, June 13.

•140 5/25 National Committee of the
U.S. Organization for the
International Radio Con-
sultative Committee,
June 13.

* 14 1 5/25 Secretary's Advisory Com-
mittee on Private Interna-
tional Law, study group on
trusts, June 20.

*142 5/25 Advisory Committee on In-
ternational Investment,
Technology, and Develop-
ment, June 18.

143 5/31 Shultz: interview on USIA's

"Worldnet," May 24.

144 5/31 Shultz: news conference at

conclusion of North Atlan-
tic Council meeting.

*Not printed in the Bulletin ■

Department of State

Free single copies of the following Depart-
ment of State publications are available from
the Correspondence Management Division,
Bureau of Public Affairs, Department of
State, Washington, D.C. 20520.

Free multiple copies may be obtained by
writing to the Office of Opinion Analysis and
Plans, Bureau of Public Affairs, Department
of State, Washington, D.C. 20520.

President Reagan

U.S. Interests in Central America, address
to the nation, May 9, 1984 (Current Policy
#576).

The U.S. and China: Building a Lasting
Friendship, Fudan University, Shanghai,
Apr. 30, 1984 (Current Policy #575).

A Historic Opportunity for the U.S. and
China, Great Hall of the People, Beijing,
Apr. 27, 1984 (Current Policy #574).

Secretary Shultz

Realism and Responsibility: The U.S. Ap-
proach to Arms Control, League of Women
Voters, Detroit, May 14, 1984 (Current
Policy #577).

Trade, Interdependence, and Conflicts of
Jurisdiction, South Carolina Bar Associa-
tion, Columbia, May 5, 1984 (Current
Policy #573).

Africa

Africa: U.S. Policy (GIST, May 1984).

Arms Control

Arms Control: MBFR Talks (GIST,
Apr. 1984).

Economics

Looking Toward London: Ten Years of
Economic Summitry, Under Secretary
Wallis, American Association of Exporters
and Importers, New York, May 23, 1984 ■
(Current Policy #579).

The Near West: America and the Pacific,
Under Secretary Wallis, World Affairs
Council, Pittsburgh, May 9, 1984 (Current
Policy #578).

Europe

NATO Ministerial Meeting (GIST, May 1984).

Refugees

Refugees: Overseas Aid and Domestic
Admissions, Director Purcell, 7th Annual
National Legal Conference on Immigration
and Refugee Policy, Mar. 30, 1984 (Current
Policy #571).

Science and Technology

East-West Relations and Technology
Transfer, Under Secretary Schneider (given
by policy adviser Marks), Federal Bar
Association, Newton, Mass., Mar. 29, 1984
(Current Policy #568).

Western Hemisphere

U.S. Central American Policy at a Cross-
roads, Assistant Secretary Motley, Subcom-
mittee on Western Hemisphere Affairs,
House Foreign Relations Committee,
May 2, 1984 (Current Policy #572).

An Expanding Private Sector: Key to Un-
precedented Growth, Ambassador Midden-
dorf, conference sponsored by the Brazilian
Exporters Association, National Confedera-
tion of Commerce, State of Sao Paulo
Federation of Industry, and Brazilian
Courier Association; Rio de Janeiro,
Mar. 28; Sao Paulo, Mar. 30, 1984 (Current
Policy #570).

U.S. Relations With Honduras and
Nicaragua, Deputy Assistant Secretary
Michel, Subcommittee on Military Installa-
tions and Facilities, House Armed Services
Committee, Mar. 28, 1984 (Current Policj
#569).

U.S.-Mexican Relations (GIST, May 1984).

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Department of State Bulletii

IDEX

My 1984
>lume 84, No. 2088

Mca. A Steady Course for American

BForeign Policy (Shultz) 35

jjiculture Foreign Policy: Its Impact on

{Agricultural Trade (Wallis) 65
s Control
sting the Nuclear Genie (Adelman) .... 42
T Arms Control (Adelman) 46

;h Atlantic Council Meets in Washington
Bush, Cheysson, Luns, Reagan, Shultz,
;exts of final communique and annex,
Washington statement on East-West rela-

;ions, proclamation) 1

ident Reagan's News Conferences of

Vlay 22 and June 14 (excerpts) 29

etary Addresses American Society of

Newspaper Editors 38

eady Course for American Foreign Policy

Shultz) 35

-U.S.S.R. Trade and Economic Council

Meeting (Palmer) 75

tern Proposals at MBFR Talks (Reagan,
Vestern statement) 45

ainess. Examining the Unitary Tax
Wallis) 68

align Policy: Its Impact on Agricultural
>ade (Wallis) 65

aetary Addresses American Society of
■lewspaper Editors 38

-.6 China Relations (Wolfowitz) 49

oifress

ST Arms Control (Adelman) 46

4 Report on Cyprus (message to the
-ongress) 73

e"w of East- West Economic Relations
Wallis) 60

.i China Relations (Wolfowitz) 49

.6 Response to Saudi Request for Military
assistance (Armacost) 80

yjus

it Report on Cyprus (message to the
Congress) 73

;t\ tion in Cyprus (Reagan) 75

eloping Countries. Foreign Policy: Its
•npact on Agricultural Trade (Wallis) . . 65

a> Asia
teady Course for American Foreign
olicy (Shultz) 35

i China Relations (Wolfowitz) 49

c< omics

* lining the Unitary Tax (Wallis) 68

o< ing Toward London: 10 Years of
.conomic Summitry (Wallis) 52

81 :w of East-West Economic Relations
Vallis) 60

.8 China Relations (Wolfowitz) 49

1 ilvador

la ion of El Salvador President Duarte
i leagan) 83

-«dent Reagan's News Conferences of
i lay 22 and June 14 (excerpts) 29

x Struggle for Freedom in Latin America
ieagan) 27

ii of El Salvador's President-Elect (joint
pmmunique) 83

ania. The Baltic States' Struggle for
rreedom (Abrams) 77

■Atlantic Alliance and the U.S. National

Interest (Kirkpatrick) 70

■ «i Atlantic Council Meets in Washington
|3ush, Cheysson, Luns, Reagan, Shultz,
fsxts of final communique and annex,
i Washington statement on East- West rela-
tions, proclamation) 1

fdent Reagan's News Conferences of
Vlay 22 and June 14 (excerpts) 29

Secretary Shultz's Interview on "Worldnet" 18
A Steady Course for American Foreign Policy

(Shultz) 35

Western Proposals at MBFR Talks (Reagan,

Western statement) 45

Germany. Berlin— A Very Special Place for

America (Reagan) 28

Industrialized Democracies

Foreign Policy: Its Impact on Agricultural

Trade (Wallis) 65

Looking Toward London: 10 Years of

Economic Summitry (Wallis) 52

Israel. Challenge to Israel's Participation

in UPU (Department announcement) . . 82
Japan
Foreign Policy: Its Impact on Agricultural

Trade (Wallis) 65

Japan Eases Restrictions on Yen (Regan) . . 59
Korea. U.S.-China Relations (Wolfowitz) . .49
Latvia. The Baltic States' Struggle for Free-
dom (Abrams) 77

Lithuania. The Baltic States' Struggle for

Freedom (Abrams) 77

Mexico

Secretary Addresses American Society of

Newspaper Editors 38

Visit of Mexican President (De la Madrid,

Reagan) 85

Middle East

President Reagan's News Conferences of

May 22 and June 14 (excerpts) 29

Secretary Addresses American Society of

Newspaper Editors 38

A Steady Course for American Foreign Policy

(Shultz) 35

U.S. Response to Saudi Request for Military

Assistance (Armacost) 80

Monetary Affairs

The American Trade Deficit in Perspective

(Burns) 55

Examining the Unitary Tax (Wallis) 68

Japan Eases Restrictions on Yen (Regan) . . 59

Nicaragua

President Reagan's News Conferences of

May 22 and June 14 (excerpts) 29

Secretary Shultz Visits El Salvador and

Nicaragua (Shultz) 84

North Atlantic Treaty Organization

The Atlantic Alliance and the U.S. National

Interest (Kirkpatrick) 70

North Atlantic Council Meets in Washington

(Bush, Cheysson, Luns, Reagan, Shultz,

texts of final communique and annex,

Washington statement on East- West rela-
tions, proclamation) 1

Secretary Shultz's Interview on "Worldnet" 18

35 Years of NATO (chronology) 22

Nuclear Policy

Arresting the Nuclear Genie (Adelman) .... 42

U.S.-China Relations (Wolfowitz) 49

Poland. Review of East-West Economic

Relations (Wallis) 60

Presidential Documents

Berlin — A Very Special Place for America

(Reagan) 28

18th Report on Cyprus (message to the

Congress) 73

Election of El Salvador President Duarte

(Reagan) 83

Situation in Cyprus (Reagan) 75

The Struggle for Freedom in Latin America

(Reagan) 27

Visit of Mexican President (De la Madrid,

Reagan) 85

Visit of Thailand's Prime Minister (Prem,

Reagan) 51

Western Proposals at MBFR Talks (Reagan,

Western statement) 45

Publications

Department of State 94

GPO Subscriptions 94

Saudi Arabia

U.S. Response to Saudi Request for Military

Assistance (Armacost) 80

U.S. to Supply Military Equipment to Saudi

Arabia (Department announcements) . .81

Security Assistance

The Struggle for Freedom in Latin America

(Reagan) 27

U.S. Response to Saudi Request for Military

Assistance (Armacost) 80

U.S. to Supply Military Equipment to Saudi

Arabia (Department announcements) . . 81
Terrorism. Arresting the Nuclear Genie

(Adelman) 42

Thailand. Visit of Thailand's Prime Minister

(Prem, Reagan) 51

Trade

The American Trade Deficit in Perspective

(Burns) 55

50th Anniversary of Reciprocal Trade Act

(Department statement) 57

Foreign Policy: Its Impact on Agricultural

Trade (Wallis) 65

The Logic and Politics of the Next Trade

Round (Lamb) 63

Looking Toward London: 10 Years of Eco-
nomic Summitry (Wallis) 52

U.S.-U.S.S.R. Trade and Economic Council

Meeting (Palmer) 75

Treaties. Current Actions 88

U.S.S.R.

The Baltic States' Struggle for Freedom

(Abrams) 77

Foreign Policy: Its Impact on Agricultural

Trade (Wallis) 65

North Atlantic Council Meets in Washington

(Bush, Cheysson, Luns, Reagan, Shultz,

texts of final communique and annex,

Washington statement on East- West rela-
tions, proclamation) 1

President Reagan's News Conferences of

May 22 and June 14 (excerpts) 29

Review' of East-West Economic Relations . . 60
Secretary Addresses American Society of

Newspaper Editors 38

A Steady Course for American Foreign Policy

(Shultz) 35

U.S.-U.S.S.R. Trade and Economic Council

Meeting (Palmer) 75

United Nations

Challenge to Israel's Participation in UPU

(Department announcement) 82

Western Hemisphere

President Reagan's News Conferences of

May 22 and June 14 (excerpts) 29

Secretary Addresses American Society of

Newspaper Editors 38

Secretary Shultz Visits El Salvador and

Nicaragua (Shultzi 84

A Steady Course for American Foreign Policy

(Shultz) 35

The Struggle for Freedom in Latin America

(Reagan) 27

Name Index

Abrams, Elliott 77

Adelman, Kenneth L 42, 46

Armacost, Michael H 80

Burns, Arthur F 55

Bush, Vice President 1

Cheysson, Claude 1

De la Madrid Hurtado, Miguel 85

Kirkpatrick, Jeane J 70

Lamb, Denis 63

Luns, Joseph M.A.H 1

Palmer, Mark 75

Prem Tinsulanonda 51

Reagan, President 1, 27, 28, 29, 45, 51,

73, 75, 83, 85

Regan, Donald T 59

Shultz, Secretary 1, 18, 35, 38, 84

Wallis, W. Allen 52, 60, 65, 68

Wolfowitz, Paul D 49

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j"he Official Monthly Record of United States Foreign Policy / Volume 84 / Number 2089

August 1984

mmvm*

UMENl^:

London

President Mitterrand

Economic
Summit/1

President Reagan

Prime Minister Nakasone

nepartmvnt of State

bulletin

Volume 84/Number 2089/August 1984

GEORGE P. SHULTZ

Secretary of State

JOHN HUGHES

Assistant Secretary for Public Affairs

PAUL E. AUERSWALD

Director,

Office of Public Communication

NORMAN HOWARD

Chief, Editorial Division

PHYLLIS A. YOUNG

Editor

SHARON R. LOTZ

Assistant Editor

The Secretary of State has determined that the
publication of this periodica] is necessary in the
transaction of the public business required by law of
this Department. Use of funds for printing this
periodical has been approved by the Director of the
Office of Management and Budget through March 31,
1987.

Department of State BULLETIN (ISSN 0041-7610)
is published monthly (plus annual index) by tin-
Department of State, 2201 C Street NW,
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20402

CONTENTS

FEATURE

1 London Economic Summit (President Reagan,
Declarations, Statement)

The President

7 Visit to Ireland, the United
Kingdom, and France
(Garret FitzGerald, Patrick J.
Hillery, President Reagan)

The Vice President

25 Visit to East and South Asia and
the Middle East (Statements,
Toasts, Remarks)

The Secretary

Terrorism: The Problem and the

Challenge
Terrorism: The Challenge to the

Democracies

Pacific

63 U.S. Policy in the Pacific Island
Region (President Reagan)

Refugees

66 Refugees: Overseas Aid and

Domestic Admissions (James N.
Purcell, Jr.)

Science & Technology

68 East- West Relations and Tech-
nology Transfer (William
Schneider, Jr.)

71 The Role of Science and Tech-
nology in Foreign Affairs
(James L. Malone)

Arms Control

34 Negotiating With the Soviets

(Paul H. Nitze)
38 Nuclear Arms Control and the

NATO Alliance (Edward L.

Rovmy)
44 Preserving Freedom and Security

(Kenneth W. Dam)

Economics

47 Steel: Domestic Industry in a

Global Market (W. Allen Wallis)

50 The Near West: America and the
Pacific (W. Allen Wallis)

Europe

53 Cyprus: Reports of Turkish

Cypriot Settlement in Varosha
(Department Statement)

53 Soviet Active Measures

(William E. Knepper)

54 Baltic Freedom Day, 1984

(Proclamation)

55 Berlin's Status in European Parli-

ament Elections (Joint
Response)

United Nations

73 Iran-Iraq War (Jose S. Sorzano,

Text of Resolution)

Western Hemisphere

74 Future Opportunities for U.S.-

Latin American Trade: The U.S.

Perspective (Langhorne A.

Motley)
77 U.S. Central American Policy at

a Crossroads (Langhorne A.

Motley)
84 Visit of Dominican Republic Presi-
dent (Salvador Jorge Blanco,

President Reagan)

Treaties

86 Current Actions

Chronology

88 June 1984

Press Releases

92 Department of State

General

57 Doctrine of Moral Equivalence
(Jeane J. Kirkpatrick)

Middle East

62 U.S. Position on Jerusalem
(Michael H. Armacost)

Publications

92 Department of State

92 GPO Subscriptions

93 Foreign Relations Volume

Released

Index

FEATURE

Economic Summit

London
Economic Summit

President Reagan attended the

10th economic summit of

the industrialized nations in London

June 7-9, 1984, which was hosted

by British Prime Minister Margaret Thatcher.

The other participants were

Prime Minister Pierre-Elliott Trudeau (Canada),

President Francois Mitterrand (France),

Chancellor Helmut Kohl (West Germany),

Prime Minister Bettino Craxi (Italy),

Prime Minister Yasuhiro Nakasone (Japan),

and Gaston Thorn, President of the

European Communities Commission.

Following are texts of four declarations

and a statement issued by the participants

and President Reagan's radio address. 1

ncaster House, the site of the 10th eco-
■ mic summit of industrialized nations, is
I uated adjacent to St. James's Palace
i .Tlooking the Mall. It is a notable exam-
| ; of a great London mansion of the
|riod spanning the end of the Georgian
< i and the beginning of that of Queen Vic-
I'ia. Construction began in 1825, and the
Iiin design and most of the decoration
rre the work of Benjamin Dean Wyatt.
I 'tween 1838 and 1843, Sir Charles Barry
|>e architect of the Houses of Parliament)
lis employed to decorate the great stair-
«se hall, which is the most splendid of its
Sad and date in England. Lancaster House
fused the collection for the London
! iseum during 1914-46 and was the locale
> a number of conferences marking impor-
I nt stages in the constitutional develop-
ment of the Commonwealth countries.

Declaration on
Democratic Values,
June 8, 1984

We, the Heads of State or Government of
seven major industrial democracies with the
President of the Commission of the European
Communities, assembled in London for the
Tenth Economic Summit meeting, affirm our
commitment to the values which sustain and
bring together our societies.

2. We believe in a rule of law which
respects and protects without fear or favour
the rights and liberties of every citizen and
provides the setting in which the human
spirit can develop in freedom and diversity.

3. We believe in a system of democracy
which ensures genuine choice in elections
freely held, free expression of opinion and
the capacity to respond and adapt to change
in all its aspects.

4. We believe that, in the political and
economic systems of our democracies, it is
for Governments to set conditions in which
there can be the greatest possible range and

freedom of choice and personal initiative; in
which the ideals of social justice, obligations
and rights can be pursued; in which enter-
prise can flourish and employment oppor-
tunities can be available for all; in which all
have equal opportunities of sharing in the
benefits of growth and there is support for
those who suffer or are in need; in which the
lives of all can be enriched by the fruits of in-
novation, imagination and scientific
discovery; and in which there can be con-
fidence in the soundness of the currency. Our
countries have the resources and will jointly
to master the tasks of the new industrial
revolution.

5. We believe in close partnership among
our countries in the conviction that this will
reinforce political stability and economic
growth in the world as a whole. We look for
co-operation with all countries on the basis of
respect for their independence and territorial
integrity, regardless of differences between
political, economic and social systems. We
respect genuine non-alignment. We are aware
that economic strength places special moral
responsibilities upon us. We reaffirm our

ugust 1984

determination to fight hunger and poverty
throughout the world.

6. We believe in the need for peace with
freedom and justice. Each of us rejects the
use of force as a means of settling disputes.
Each of us will maintain only the military
strength necessary to deter aggression and to
meet our responsibilities for effective
defence. We believe that in today's world the
independence of each of our countries is of
concern to us all. We are convinced that in-
ternational problems and conflicts can and
must be resolved through reasoned dialogue
and negotiation and we shall support all ef-
forts to this end.

7. Strong in these beliefs, and endowed
with great diversity and creative vigour, we
look forward to the future with confidence.

Left to right are Prime Minister Craxi, President Thorn, President Reagan, Prime
Minister Thatcher, President Mitterrand, Prime Minister Nakasone, Prime Minister
Trudeau, and Chancellor Kohl.

Economic Declaration,
June 9, 19842

We, the Heads of State or Government of
seven major industrialised countries and the
President of the Commission of the European
Communities, have gathered in London from
7 to 9 June 1984 at the invitation of the Kt
Hon Margaret Thatcher FRS MP, the Prime
Minister of the United Kingdom, for the
tenth annual Economic Summit.

2. The primary purpose of these meetings
is to enable Heads of State or Government to
come together to discuss economic problems,
prospects and opportunities for our countries

and for the world. We have been able to
achieve not only closer understanding of eacli
other's positions and views but also a large
measure of agreement on the basic objective?
of our respective policies.

3. At our last meeting, in Williamsburg i
1983, we were already able to detect clear
signs of recovery from world recession. That
recovery can now be seen to be established ii
our countries. It is more soundly based than
previous recoveries in that it results from th<
firm efforts made in the Summit countries
and elsewhere over recent years to reduce in
flation.

FEATURE

Economic Summit

4. But its continuation requires unremit-
l efforts. We have to make the most of

opportunities with which we are now
sented to reinforce the basis for enduring
iwth and the creation of new jobs. We
■d to spread the benefits of recovery wide-
both within the industrialised countries
1 also to the developing countries, especial-
;he poorer countries who stand to gain
re than any from a sustainable growth of
world economy. High interest rates, and
ure to reduce inflation further and damp
vn inflationary expectations, could put
overy at risk. Prudent monetary and
Igetary policies of the kind that have
ught us so far will have to be sustained
I where necessary strengthened. We re-
rm the commitment of our Governments
:hose objectives and policies.

5. Not the least of our concerns is the
■wing strain of public expenditure in all

■ countries. Public expenditure has to be
it within the limits of what our national
nomies can afford. We welcome the in-
asing attention being given to these prob-

Jis by national governments and in such in-
national bodies as the Organisation for
imomic Co-operation and Development
|CD).

I 6. As unemployment in our countries re-
n ins high, we emphasise the need for sus-
tt led growth and creation of new jobs. We
til st make sure that the industrial economies
il,pt and develop in response to demand and
ti technological change. We must encourage

■ ive job training policies and removal of
lidities in the labour market, and bring

I mt the conditions in which more new jobs

I I be created on a lasting basis, especially
I the young. We need to foster and expand
I international trading system and

li 'ralise capital markets.
I 7. We are mindful of the concerns ex-
p ssed by the developing countries, and of
t political and economic difficulties which
8 ny of them face. In our discussion of each
dthe issues before us we have recognised
t economic interdependence of the in-
ijjtrialised and developing countries. We
l.ffirm our willingness to conduct our rela-
• ns with them in a spirit of goodwill and co-
loration. To this end we have asked
I nisters of Finance to consider the scope for
fensified discussion of international finan-

■ 1 issues of particular concern to developing
iintries in the IBRD [International Bank for

■ construction and Development] Develop-
l-nt Committee, an appropriate and broadly
liresentative forum for this purpose.

I 8. In our strategy for dealing with the
jot burdens of many developing countries, a
jy role has been played by the International
Imetary Fund (IMF), whose resources have
1 gn strengthened for the purpose. Debtor
i antries have been increasingly ready to ac-
i at the need to adjust their economic
jilicies, despite the painful and courageous

efforts it requires. In a climate of world
recovery and growing world trade, this
strategy should continue to enable the inter-
national financial system to manage the prob-
lems that may still arise. But continuously
high or even further growing levels of inter-
national interest rates could both exacerbate
the problems of the debtor countries and
make it more difficult to sustain the strategy.
This underlines the importance of policies
which will be conducive to lower interest
rates and which take account of the impact of
our policies upon other countries.
9. We have therefore agreed:

(1) to continue with and where necessary
strengthen policies to reduce inflation and in-
terest rates to control monetary growth and
where necessary reduce budgetary deficits;

(2) to seek to reduce obstacles to the
creation of new jobs:

• by encouraging the development of in-
dustries and services in response to demand
and technological change including in in-
novative small and medium-sized businesses;

• by encouraging the efficient working of
the labour market;

• by encouraging the improvement and
extension of job training;

• by encouraging flexibility in the pat-
terns of working time;

• and by discouraging measures to
preserve obsolescent production and
technology;

(3) to support and strengthen work in the
appropriate international organisations,
notably the OECD, on increasing understand-
ing of the sources and patterns of economic
change, and on improving economic efficiency
and promoting growth, in particular by en-
couraging innovation and working for a more
widespread acceptance of technological
change, harmonising standards and facili-
tating the mobility of labour and capital;

(4) to maintain and wherever possible in-
crease flows of resources, including official
development assistance and assistance
through the international financial and
development institutions, to the developing
countries and particularly to the poorest
countries; to work with the developing coun-
tries to encourage more openness towards
private investment flows; and to encourage
practical measures in those countries to con-
serve resources and enhance indigenous food
and energy production. Some of us also wish
to activate the Common Fund for Com-
modities;

(5) in a spirit of co-operation with the
countries concerned, to confirm the strategy
on debt and continue to implement and
develop it flexibly case by case; we have
reviewed progress and attach particular im-
portance to:

• helping debtor countries to make
necessary economic and financial policy
changes, taking due account of political and
social difficulties;

• encouraging the IMF in its central role
in this process, which it has been carrying
out skillfully;

• encouraging closer co-operation be-
tween the IMF and the International Bank
for Reconstruction and Development (IBRD),
and strengthening the role of the IBRD in
fostering development over the medium and
long term;

• in cases where debtor countries are
themselves making successful efforts to im-
prove their position, encouraging more ex-
tended multi-year rescheduling of commercial
debts and standing ready where appropriate
to negotiate similarly in respect of debts to
governments and government agencies;

• encouraging the flow of long-term
direct investment; just as there is need for in-
dustrial countries to make their markets
more open for the exports of developing
countries, so these countries can help
themselves by encouraging investment from
the industrial countries;

• encouraging the substitution of more
stable long-term finance, both direct and
portfolio, for short-term bank lending;

(6) to invite Finance Ministers to carry
forward, in an urgent and thorough manner,
their current work on ways to improve the
operation of the international monetary
system, including exchange rates, sur-
veillance, the creation, control and dis-
tribution of international liquidity and the
role of the IMF; and to complete the present
phase of their work in the first half of 1985
with a view to discussion at an early meeting
of the IMF Interim Committee. The question
of a further allocation of Special Drawing
Rights is to be reconsidered by the IMF In-
terim Committee in September 1984;

(7) to carry forward the procedures
agreed at Versailles and at Williamsburg for
multilateral monitoring and surveillance of
convergence of economic performance toward
lower inflation and higher growth;

(8) to seek to improve the operation and
stability of the international financial system,
by means of prudent policies among the ma-
jor countries, by providing an adequate flow
of funding to the international financial
institutions, and by improving international
access to capital markets in industrialised
countries;

(9) to urge all trading countries, in-
dustrialised and developing alike, to resist
continuing protectionist pressures, to reduce
barriers to trade and to make renewed ef-
forts to liberalise and expand international
trade in manufactures, commodities and serv-
ices;

jgust1984

(10) to accelerate the completion of cur-
rent trade liberalisation programmes, par-
ticularly the 1982 GATT [General Agreement
on Tariffs and Trade] work programme, in
co-operation with other trading partners; to
press forward with the work on trade in serv-
ices in the international organisations; to
reaffirm the agreement reached at the OECD
Ministerial Meeting in May 1984 on the im-
portant contribution which a new round of
multilateral trade negotiations would make to
strengthening the open multilateral trading
system for the mutual benefit of all econ-
omies, industrial and developing; and,
building on the 1982 GATT work programme,
to consult partners in the GATT with a view
to decisions at an early date on the possible
objectives, arrangements and timing for a
new negotiating round.

10. We are greatly concerned about the
acute problems of poverty and drought in
parts of Africa. We attach major importance
to the special action programme for Africa,
which is being prepared by the World Bank
and should provide renewed impetus to the
joint efforts of the international community
to help.

11. We have considered the possible im-
plications of a further deterioration of the
situation in the Gulf for the supply of oil. We
are satisfied that, given the stocks of oil
presently available in the world, the avail-
ability of other sources of energy, and the
scope for conservation in the use of energy,
adequate supplies could be maintained for a
substantial period of time by international co-
operation and mutually supportive action. We
will continue to act together to that end.

12. We note with approval the continuing
consensus on the security and other implica-
tions of economic relations with Eastern
countries, and on the need to continue work
on this subject in the appropriate organisa-
tions.

13. We welcome the further report of the
Working Group on Technology, Growth and
Employment created by the Versailles
Economic Summit, and the progress made in
the eighteen areas of co-operation, and invite
the Group to pursue further work and to
report to Personal Representatives in time
for the next Economic Summit. We also wel-
come the invitation of the Italian Government
to an international conference to be held in
Italy in 1985 on the theme of technological
innovation and the creation of new jobs.

14. We recognise the international dimen-
sion of environmental problems and the role
of environmental factors in economic develop-
ment. We have invited Ministers responsible
for environmental policies to identify areas
for continuing co-operation in this field. In
addition we have decided to invite the Work-
ing Group on Technology, Growth and Em-
ployment to consider what has been done so
far and to identify specific areas for research

on the causes, effects and means of limiting
environmental pollution of air, water and
ground where existing knowledge is inade-
quate, and to identify possible projects for in-
dustrial co-operation to develop cost-effective
techniques to reduce environmental damage.
The Group is invited to report on these mat-
ters by 31 December 1984. In the meantime
we welcome the invitation from the Govern-
ment of the Federal Republic of Germany to
certain Summit countries to an international
conference on the environment in Munich on
24-27 June 1984.

15. We thank the Prime Minister of
Japan for his report on the Hakone Con-
ference of Life Sciences and Mankind,
organised by the Japan Foundation in March
1984, and welcome the intention of the
French Government to sponsor a second Con-
ference in 1985.

16. We believe that manned spaced sta-
tions are the kind of programme that pro-
vides a stimulus for technological develop-
ment leading to strengthening economies and
improved quality of life. Such stations are be-
ing studied in some of our countries with a
view to their being launched in the
framework of national or international pro-
grammes. In that context each of our coun-
tries will consider carefully the generous and
thoughtful invitation received from the Presi-
dent of the United States to other Summit
countries to participate in the development of
such a station by the United States. We
welcome the intention of the United States to
report at the next Summit on international
participation in their programme.

17. We have agreed to meet again next
year and have accepted the Federal
Chancellor's invitation to meet in the Federal
Republic of Germany.

Declaration on
East-West Relations
and Arms Control,
June 9, 1984

1. We had a substantial discussion of East-
West relations. We stressed that the first
need is for solidarity and resolve among us
all.

2. At the same time, we are determined
to pursue the search for extended political
dialogue and long-term co-operation with the
Soviet Union and her allies. Contacts exist
and are being developed in a number of
fields. Each of us will pursue all useful oppor-
tunities for dialogue.

3. Our aim is security and the lowest
possible level of forces. We wish to see early
and positive results in the various arms con-
trol negotiations and the speedy resumption
of those now suspended. The United States

has offered to re-start nuclear arms control
talks anywhere, at any time, without precon-
ditions. We hope that the Soviet Union will
act in a constructive and positive way. We
are convinced that ihis would be in the com-
mon interest of both East and West. We are
in favour of agreements which would build
confidence and give concrete expression,
through precise commitments, to the princi-
ple of the non-use of force.

4. We believe that East and West have
important common interests: in preserving
peace; in enhancing confidence and security;
in reducing the risks of surprise attack or
war by accident; in improving crisis manage-
ment techniques; and in preventing the
spread of nuclear weapons.

Declaration on
International
Terrorism,
June 9, 1984

1. The Heads of State and Government dis-
cussed the problem of international ter-
rorism.

2. They noted that hijacking and kid-
napping had declined since the Declarations
of Bonn (1978), Venice (1980) and Ottawa
(1981) as a result of improved security
measures, but that terrorism had developed
other techniques, sometimes in association
with traffic in drugs.

3. They expressed their resolve to comb. <
this threat by every possible means,
strengthening existing measures and develoj,
ing effective new ones.

4. They were disturbed to note the ease
with which terrorists move across interna-
tional boundaries, and gain access to
weapons, explosives, training and finance.

5. They viewed with serious concern the
increasing involvement of states and govern-
ments in acts of terrorism, including the
abuse of diplomatic immunity. They
acknowledge the inviolability of diplomatic
missions and other requirements of interna-
tional law; but they emphasised the obliga-
tions which that law also entails.

6. Proposals which found support in the
discussion included the following:

• closer co-operation and co-ordination
between police and security organisations an-
other relevant authorities, especially in the
exchange of information, intelligence and
technical knowledge;

• scrutiny by each country of gaps in its
national legislation which might be exploited
by terrorists;

• use of the powers of the receiving stat
under the Vienna Convention in such matter
as the size of diplomatic missions, and the
number of buildings enjoying diplomatic
immunity;

Department of State Bulletir

FEATURE

Ecomonic Summit

1 action by each country to review the
le of weapons to states supporting ter-
rism;

1 consultation and as far as possible
'''•operation over the expulsion or exclusion
'■'< am their countries of known terrorists, in-
lding persons of diplomatic status involved
terrorism.

7. The Heads of State and Government
cognised that this is a problem which af-
cts all civilised states. They resolved to pro-
Dte action through competent international
ganisations and among the international
J mmunity as a whole to prevent and punish
rrorist acts.

statement on the
-an-Iraq Conflict,
.une 9, 1984

We discussed the Iraq/Iran conflict in all
'. various aspects.

2. We expressed our deep concern at the
punting toll in human suffering, physical

;. mage and bitterness that this conflict has
ought; and at the breaches of international
manitarian law that have occurred.

3. The hope and desire of us all is that
th sides will cease their attacks on each

! her and on the shipping of other states,
le principle of freedom of navigation must
respected. We are concerned that the con-
ct should not spread further and we shall
• what we can to encourage stability in the
gion.

4. We encourage the parties to seek a
aceful and honourable settlement. We shall
.pport any efforts designed to bring this
iout, particularly those of the United Na-
)ns Secretary-General.

5. We also considered the implications for
orld oil supplies on the lines set out in the
conomic Declaration. We noted that the
orld oil market has remained relatively
able. We believe that the international
■stem has both the will and the capacity to

I >pe with any foreseeable problems through
I le continuation of the prudent and realistic
I jproach that is already being applied.

In January 1984, President Reagan committed the United States to develop a permanently
manned space station by the early 1990s to satisfy U.S. civil and commercial requirements
in space. At the same time, he invited America's friends and allies to participate in the
program. The space station will benefit the scientific research of all participating nations
and provide the capability to conduct space-based research in many fields including
astrophysics, earth sciences and applications, life sciences, astronomy, materials process-
ing, and communications. Viewing the model space station with President Reagan are EC
Commission President Thorn, Chancellor Kohl, Prime Minister Thatcher, Italian Foreign
Minister Andreotti, Canadian Finance Minister Lalonde, and Prime Minister Nakasone.

President's
Radio Address,
June 9, 19843

Greetings from London. As you prob-
ably know, Nancy and I have been in
Europe for 8 days, visiting Ireland, com-
memorating the 40th anniversary of
D-Day at Normandy, and now meeting
with the leaders of the major in-
dustrialized democracies at the economic
summit to strengthen the basis for
freedom, prosperity, and peace.

Change comes neither easily nor
quickly in foreign affairs. Finding solu-
tions to critical global problems requires
lengthy and sustained efforts, the kind
we've been making ever since my first
economic summit in Ottawa in 1981.
Those efforts are now paying off as we
reap the benefits of sound policies.
Think back 4 years — America was weak
at home and abroad. Remember double-
digit inflation, 20% interest rates, zero

growth, and those never-ending excuses
that such misery would be part of our
lives for years to come. And remember
how our foreign policy invited Soviet ag-
gression and expansion in Afghanistan,
Central America, and Africa. Entire
countries were lost. Doubt spread about
America's leadership in defense of
freedom and peace. And so, freedom
and peace became less secure.

A lot has changed. Today America
stands taller in the world. At home
we've made a fundamental change in
direction — away from bigger and bigger
government, toward more power and in-
centives for people; away from confusion
and failure, toward progress through
commitment to the enduring values of
Western civilization; away from
weakness and instability, toward peace
through strength and a willingness to
negotiate.

Together with our allies, we've tried
to adopt a similar strategy for progress
abroad — guided by realism, by common

\ugust 1984

■4.

values and interests, and by confidence
that we will not remain prisoners of fear
and a disappointing past. We can and
will move forward to better days.

Last year the United States hosted
the Williamsburg summit. It has been an
active year for allied relations as we
grappled with economic and security
problems, but we didn't dwell on dif-
ferences. We joined in a peace and
security statement and a blueprint for
world economic recovery. Williamsburg
was an unprecedented endorsement of
Western values. Our alliance emerged
stronger and more united than ever.
Peace and prosperity were made more
secure.

Later in the year I traveled to Japan
and Korea to emphasize the importance
we attached to the dynamic Pacific
region. Here too, we faced tough prob-
lems, particularly in trade with Japan.
But Prime Minister Nakasone is a man
of vision and strength, who has worked
hard with me to iron out our dif-
ferences, and we've made progress.
Japan has opened up its trading and
financial markets and moved to increase
its defense expenditures, so vital to pre-
serving peace and freedom in the Pacific
Basin. This will mean more U.S. jobs

and greater security for both our na-
tions.

In April I returned to the Pacific
region to visit China. Our relations have
steadily improved and our visit capped
important agreements that will
stimulate U.S. exports to China as we
cooperate with them to modernize their
economy.

Now here in London at this year's
economic summit, it's clear we've made
impressive gains. In 1981 our economies
had an average growth rate of only
1.8% and 8V2% inflation. Today, our
average growth rate has risen to 4%,
while inflation has been cut in half.
Stronger growth means more jobs with
the U.S. economy leading the way.
We've created more than 6 million jobs
in the last 18 months, and we're ventur-
ing into new, promising areas. We've of-
fered our summit partners the oppor-
tunity to participate with us in the
development of our manned space sta-
tion. An international space station will
stimulate technology development,
strengthen our economies, and improve
the quality of life into the next century.

I've stressed in London that con-
tinued progress will require new deter-
mination to carry out our common

strategy for prosperity and peace. We
must summon courage. We must con-
tinue with action to curb inflation by
reducing unnecessary spending, spur
greater growth by reducing regulation,
trade barriers, and personal income tax
rates. And, yes, we must be prepared
for peace by strengthening NATO's abili-
ty to deter war, while making clear
we're prepared to reduce nuclear
weapons dramatically as soon as the
Soviets are ready to work with us on
this all-important goal.

This has been a year of progress, a
year when we and our friends in Europe
and the Pacific set aside differences and
united as great democracies should be
with shared vision and values. That
progress, stretching beyond America
from the Pacific Basin to a strengthened
Atlantic alliance, is a source of hope for
a more prosperous and safer world.

■Texts from Weekly Compilation of
Presidential Documents of June 18, 1984.

2Prime Minister Thatcher read the
declaration to reporters assembled in the
Great Hall of the Guildhall and in the
presence of the other summit participants.

3Recorded in London for broadcast in the
United States. ■

Department of State Bulletin

THE PRESIDENT

Visit to Ireland,

the United Kingdom,

and France

President Reagan departed the

United States on June 1, 1984,

to visit Ireland (June 1-4),

the United Kingdom (June 4-10),

where he attended the economic summit,

and to participate in ceremonies

commemorating the 40th anniversary

ofD-Day at Normandy (June 6).

He returned to Washington on June 10.

Following are remarks made on

various occasions during the trip.1

IRELAND

Shannon,
Arrival Remarks,
June 1, 1984

President and Mrs. Hillery, Prime
Minister and Mrs. FitzGerald,
distinguished guests, and I want to add
with the greatest of pleasure — I'll
try — a chairde Gaeil [Irish friends].
[Laughter] How did I do? [Applause] But
on behalf of Nancy and myself, thank
you very much for your warm and
wonderful Irish welcome.

We're beginning a mission to
strengthen ties of friendship and
cooperation among the world's leading
democracies. It's our deepest hope and
our earnest conviction that we can make
genuine progress together toward a
safer world, a more prosperous world, a
far better world.

To be able to begin our journey on
this isle of wondrous beauty, with a
countryside green as no other place
seems to be, to be able to stand on the
soil of my ancestors among all of you is,
for me, a very special gift. I want you to

know that for this great-grandson of
Ireland, this is a moment of joy.

And I'm returning not only to my
own roots, I'm returning to America's
roots. So much of what America means
and stands for we owe to you — to your
indomitable spirit and generosity and to
your impassioned love for liberty and in-
dependence.

There are few people on Earth
whose hearts burn more with the flame
of freedom than the Irish. George
Washington said, "When our friendless
standard was first unfurled for
resistance, who were the strangers who
first mustered around our staff? And
when it reeled in fight, who more brave-
ly sustained it than Erin's generous
sons?" You did.

America has always been a haven of
opportunity for those seeking a new life.
They, in turn, have given to us, they
have shaped us and enriched us. And
from the beginning, when that first
large party of your ancestors arrived at
Newport News in 1621, your Irish blood
has enriched America.

With courage and determination,
you helped our struggling colony break
free. And then day by day, by the sweat
of your brow and with an ache in your

THE PRESIDENT

back, you helped turn our small,
undeveloped country into a great and
mighty nation. Your hearts and minds
shaped our literacy and cultural history.
Your smiles, mirth, and song lifted our
spirits with laughter and music. And
always, you reminded us by your deep
faith that wisdom and truth, love and
beauty, grace and glory begin in
Him— our Father, our Creator, our lov-
ing God.

No wonder we've been blessed all
these years by what some call "the luck
of the Irish."

Today the sons and daughters of our
first Irish settlers number 40 million
strong. Speaking for them, and even for
those not so fortunate, may I say: We're
still part of you; we have and will re-
main true to your values; long live Irish-
American friendship.

The challenges to peace and freedom
that we face today are neither easy nor
free from danger. But face them we
must, and surmount them we can, pro-
viding that we remember the rights of
individual liberty, and of government
resting on the consent of the governed,
are more than the sole position of a
chosen few; they are universal rights,
gifts from God to men and women
everywhere. And those rights are a
crucial anchor for stability in a troubled
world, a world where peace is threaten-
ed by governments that oppress their
citizens, renounce God, and prey on
their neighbors. Edmund Burke's warn-
ing of nearly two centuries ago holds
true today: "The only thing necessary
for the triumph of evil is for good men
to do nothing."

Ireland today is undertaking impor-
tant responsibilities in international
councils, and through your peacekeeping
forces, to help reduce the risks of war.
The United States bears a heavy burden
for strengthening economic development
and preserving peace, and we're deeply
grateful for Ireland's contributions.
Americans are people of peace.
We've known and suffered the trauma
of war, witnessed the fruits of recon-
ciliation. And that is why we pray
tolerance and reconciliation will one day
unite the Catholics and Protestants in
Northern Ireland in a spirit of commun-
ion and community. And that is why
those who advocate violence or engage
in terrorism in North Ireland will never
be welcome in the United States.

Looking to the future, I believe
there's reason for optimism and con-
fidence. America's economic expansion
can and should bring more jobs and op-
portunities to your people. And the more

than 300 U.S. companies that are based
here demonstrate our clear commitment
to a future of peace and well-being for
all the people of Ireland, North and
South.

So, thank you, again, for making
Nancy and me feel so welcome. And
may I speak for so many of your
families and friends in America when I
say the words: "Ireland, oh,
Ireland . . . Country of my fathers . . .
Mother of my yearning, love of all my
longings, home of my heart ..."

Galway,

University College,
June 2, 1984a

A Chairde Gaeil — thank you.

I very much appreciate the honor
that you've done me today. A degree,
honorary though it may be, is a recogni-
tion of a certain understanding of
culture and of the truths that are at the
foundation of Western civilization. And
a degree from an Irish university, in this
respect, is of even greater significance.

I have to confess that on the 25th
anniversary of my own graduation, my
alma mater presented me with an
honorary degree, and thereby
culminated 25 years of guilt that I had
nursed, because I had always thought
the first one they gave me was
honorary. [Laughter]

But I would like to take this moment
to congratulate your distinguished presi-
dent of University College, Galway, Dr.
O'hEocha for all that he has done and is
doing to overcome the spiral of violence
which has plagued Northern Ireland. As
chairman of the New Ireland Forum,
you helped to open doors of opportunity
for peace and reconciliation.

Progress will depend on other
responsible leaders, in both parts of
Ireland and in Great Britain, following
your example. As far as the United
States is concerned, we applaud all
those who strove for constructive
political cooperation and who renounce
violence. We pray that men and women
of good will in all parts of this land can,
through mutual consent and consulta-
tion, find a way of bringing peace and
harmony to this island that means so
much to us.

It was here in Ireland that monks
and scholars preserved the theological
and classical achievements of the
Western world during a time of
darkness on the Continent of Europe.

.:.

With the triumph of St. Patrick and
Christianity, Ireland emerged as one of j
the most learned countries of Europe,
attracting students from distant lands
and known for centuries as the Island of h
Saints and Scholars.

This veneration of knowledge is part
of our heritage I am most proud to
share. While tyrants in many nations
stamped their populations into conformi-
ty and submission, our ancestors enjoyed
heated exchang'es of ideas as far back as-
in the court of good King Brian Boru.
It's part of our blood. That's what I keepfi
telling myself every time I try to iron
out my differences with the Speaker of
our House of Representatives, a lad by
the name of Tip O'Neill. [Laughter]
He's a great son of Ireland and
America as well, and I can say that,
knowing that we have heartfelt dif-
ferences of opinion. Yet, in free
societies, differences are expected, in-
deed, encouraged. It is this freedom to
disagree, to question, to state one's case
even when in opposition to those in
authority that is the cornerstone of
liberty and human progress.

When I arrived in Shannon yester-
day, I mentioned that I was not only
returning to my own roots but also to
those of my country's freedom.
Historically, of course, no one can doubt
Ireland's enormous contributions to
American liberty. Nine of the signers of
our Declaration of Independence were oi
Irish ancestry; four were born in
Ireland. Twenty generals in our Revolu-
tionary Army were of Irish ancestry.
Generals Montgomery, Sullivan, Wayne,
and others were in the thick of the bat-
tle. On Washington's personal staff were
Generals Moyland and Fitzgerald. And
on the high seas, Commodore John
Barry, considered by many the father of
the United States Navy, was born in
County Wexford.

As officers and as soldiers, sailors,
and marines, Irish immigrants added
fire to the American Revolution, a fire
that ignited a flame of liberty as had
never before been seen. This was not a
result of uncontrollable historical forces
but the accomplishment of heroic in-
dividuals whose commitment and
courage shook the foundations of em-
pires. William Butler Yeats put it well:
"Whatever flames upon the night, man's
own resinous heart has fed." And I
imagine the British weren't surprised to
see just who was fanning those flames.
Sir Henry Clinton wrote home to Lon-
don that, "the emigrants from Ireland
are our most serious opponents."

Department of State Bulletin

THE PRESIDENT

By the time of the American Revolu-
n, Ireland was already a nation
eped in culture and historical tradi-
ns, a fact evidenced by your own city
Gal way — now my own city of
way — which is celebrating its 500th
niversary. Permit me to congratulate
of your citizens on this august occa-
>n.

This esteemed university is only one
rt of the traditional educational glory
Galway. I'm told that as far back as
80, Galway Mayor Dominick Lynch
unded a free school here which became
well-known center of Catholic culture
id nationalist activity, attracting pupils
am near and far. By 1627 so many
jre flocking here, many with no means
support, that the city ordered
Dreign beggars and poor scholars" to
whipped out of town. Now, consider-
g the degree you've just bestowed on
e, I can hope that that rule is no
nger in effect. [Laughter]

I'm afraid we have no communities
lite so venerable as Galway in the
nited States. But what we lack in
:ars we try to make up for and try
ird in spirit. From the time of our in-
■pendence until the present moment,
e mainspring of our national identity
is been a common dedication to the
inciples of human liberty. Further, we
'lieve there's a vital link between our
eedom and the dramatic progress — the
crease in our material well-being that
e've enjoyed during these last 200
;ars.

Freedom motivates people of
urage and creativity to strive, to im-
•ove, and to push back the boundaries
' knowledge. Here, too, the Irish
laracter has contributed so much,
alway, a city Columbus, as has been
id already, is supposed to have visited
i his way to the New World, is on a
>ast which for so long was the western
ige, the frontier of the known world.

This is the 1,500th anniversary of
le birth of St. Brendan, who, legend
■lis us, sailed west into uncharted
aters and discovered new lands. This
an of God, a man of learning whose
onasteries were part of Ireland's
olden Age, may, indeed, have been the
rst tie between Ireland and America. I
nderstand much time and effort has
one into organizing what will be an an-
ual transatlantic yacht race between
reland and the United States com-
lemorating Brendan's voyage. I com-
lend those making this effort to
stablish what could prove to be an ex-
iting new link between our two coun-
ries.

President Reagan, accompanied by Michael Leahy (left). Mayor of Galway, and Colm
D'hEocha, President of the University College, on his way to receive an honorary doc-
torate of law degree from the university.

\ugust 1984

THE PRESIDENT

Whether Brendan reached the
American Continent or not, there is no
doubt about the Irish role in taming the
wilderness of the New World and turn-
ing America into an economic dynamo
beyond imagination. The Irish came by
the millions, seeking refuge from tyran-
ny and deprivation — from hunger of the
body and of the soul. Irish Americans
worked in the factories. They built our
railroads and, as with my family, settled
and farmed the vast stretches of un-
cultivated prairie in the heartland of
America.

The dream of a better life brought
these people to our shores and millions
of others from every corner of the
world. They and their descendants main-
tain great pride in their ancestry — but
also to say thank you to your nation and
to your people for all you contributed to
the spirit and well-being of the United
States of America.

Certainly an important part of that
spirit has and must remain close people-
to-people contacts. The Prime Minister
and I are, therefore, pleased to an-
nounce our agreement to increase
academic exchange programs between
the United States and Ireland.

We have instructed the appropriate
agencies to put this into effect as soon
as possible. We have a long tradition of
academic cooperation; we'll strengthen
it. And for our part, we intend to triple
the number of students and scholars —
triple them — in participating in the
programs.

America in these last four decades
has assumed a heavy burden of respon-
sibility to help preserve peace and pro-
mote economic development and human
dignity throughout the world. Some-
times, as is to be expected in all human
endeavors, mistakes were made. Yet,
overall, I believe that we have an admir-
able record.

There is something very important I
want you to know, and then I will
hasten on. The American people still
hold dear those principles of liberty and
justice for which our forefathers sacri-
ficed so much. Visiting America you
understand this — and I hope that each
of you will one day be able to do that.

We're still a nation comprised of
good and decent people whose fun-
damental values of tolerance, compas-
sion, and fairplay guide and direct the
decisions of our government.

Today, the free world faces an enor-
mously powerful adversary. A visit to
that country or to its colonies would
reveal no public disagreement, no right
of assembly, no independent unions.

What we face is a strong and aggressive
military machine that prohibits fun-
damental freedoms.

Our policy is aimed at deterring ag-
gression and helping our allies and
friends to protect themselves, while, at
the same time, doing everything we can
to reduce the risks of war.

We seek negotiations with the
Soviet Union, but unfortunately we face
an empty chair.

I'll be speaking more on this in my
speech to Parliament, but right now I
think that I should cut short whatever I
was going to say, because I would like to
bring up a proclamation in which we are
congratulating Galway on its 500th
anniversary.

This is our greeting on the quin-
centennial from our country to your city.
Let us hope in our hearts that we will
always stand together. Brothers and
sisters of Ireland, Dia libh go leir [God
be with you all].

Radio Address,
June 2, 1984'

Top o' the mornin' to you. I'm speaking
from a small town named Cong in
western Ireland, first stop on a 10-day
trip that will also take Nancy and me to
France and England.

We're in an area of spectacular
beauty overlooking a large lake filled
with islands, bays, and coves. And those
of you who, like me, can claim the good
fortune of Irish roots, may appreciate
the tug I felt in my heart yesterday
when we saw the Emerald Isle from Air
Force One. I thought of words from a
poem about Ireland:

"A place as kind as it is green, the greenest
place I've ever seen."

I told our welcoming hosts that to
stand with them on the soil of my
ancestors was, for this great-grandson
of Ireland, a very special moment. It
was a moment of joy.

Earlier today we were in Galway, a
coastal city celebrating its 500th an-
niversary. Legend has it Columbus
prayed at a church there on his way to
the New World. For a thousand years,
Ireland was considered the western edge
of civilization and a place that continued
to revere learning during a time of
darkness on the Continent of Europe.

That reverence earned Ireland its
reputation as the Island of Saints and
Scholars. I was pleased to address
representatives of University College in
Galway, to speak to them of Ireland's

many contributions to America, and to
give thanks for those great, great forces
of faith and love for liberty and justice
that bind our people.

The president of that institution, Dr.
O'hEocha, also chaired a group called
the New Ireland Forum, which has
sought to foster a spirit of tolerance and
reconciliation in Northern Ireland, so thi
spiral of violence that has cost so many
innocent lives there can be finally ended.

Ireland is a beautiful, proud, and in-
dependent land with a young and
talented population. But they have an
employment problem. By the strength ol
our economy, and by the presence of
some 300 U.S. firms here, Americans
can and will help our Irish cousins
create jobs and greater opportunities.
And, of course, what helps them will
help us, too.

Tomorrow, Nancy and I will travel
to Ballyporeen for a nostalgic visit to
the original home of the Reagan clan.
On Monday, we'll be in Dublin, where IT
have the honor of addressing a joint ses
sion of the Irish Parliament, as John
Kennedy did here 21 years ago.

When we leave Ireland, we'll be par-
ticipating in two events that mark
America's determination to help build a
safer, more prosperous world.

On June 6th, I'll join former U.S.
Army Rangers at the historic battlefield
of Pointe du Hoc and, later, President
Mitterrand and other American veteran*
at Omaha Beach and Utah Beach on the
Normandy coast of France. Together
we'll commemorate the 40th anniversar
of D-Day, the great Allied invasion that
set Europe on the course toward liberty
democracy, and peace.

That great battle and the war it
helped bring to an end mark the begin-
ning of nearly 40 years of peace in
Europe — a peace preserved not by good
will alone, but by the strength and mora
courage of the NATO alliance. On June
6th, I will reaffirm America's faithful
commitment to NATO. If NATO re-
mains strong and unified, Europe and
America will remain free. If NATO can
continue to deter war, Europe and
America can continue to enjoy
peace — 40 more years of peace.

And let me make one thing very
plain: A strong NATO is no threat to
the Soviet Union. NATO is the world's
greatest peace movement. It never
threatens; it defends. And we will con-
tinue trying to promote a better
dialogue with the Soviet Union. The
Soviets could gain much by helping us
make the world safer, particularly
through arms reductions. That would

Department of State Bulletin

THE PRESIDENT

*i&a*V$S&*

■■>;■■

ee them to devote more resources to

eir people and economy.
Growth and prosperity will occupy

lr attention when we return to London
. |r the annual economic summit of the
j ajor industrialized countries. And we'll
j? marking another important anniver-
liry: 50 years ago, America's leaders
lid the vision to enact legislation known
j 5 the Reciprocal Trade Agreements Act
I: 1934. It helped bring an end to a ter-
jble era of protectionism that nearly
lestroyed the world's economies.

We'll talk about how best to main-
tain the recent progress that has lifted
hopes for a worldwide recovery for our
common prosperity. You can be proud
that the strength of the U.S. economy
has led the way. I believe continued
progress lies with freer trade and more
open markets. Less protectionism will
mean more progress, more growth,
more jobs, a bigger slice of pie for
everyone.

As we meet in Normandy and Lon-
don, we'll have much to be thankful for,
much to be optimistic about, but still
much to do.

The President and Secretary Shultz confer
at Ashford Castle (background), where
President and Mrs. Reagan stayed during
part of their visit in Ireland. Built over a
period of 30 years by Lord Ardilaun in the
19th century, Ashford Castle incorporates
in its castlellated facade the remains of a
13th century De Burgo Castle and the
original Ashford House, built in the style
of a French chateau. In more recent years,
Ashford has been renovated and luxurious-
ly appointed to create one of Europe's
premier castle hotels. It has a fairy tale
setting on the shores of beautiful Lough
Corrib, the second largest lake in Ireland,
with its hundreds of islands, bays, and
coves.

August 1984

THE PRESIDENT

Ballyporeen,
Village Square,
June 3, 1984

In the business that I formerly was in, I
would have to say this is a very difficult
spot — to be introduced to you who have
waited so patiently — following this
wonderful talent that we've seen here.
And I should have gone on first, and
then you should have followed —
[laughter] — to close the show. But thank
you very much.

Nancy and I are most grateful to be
with you here today, and I'll take a
chance and say, Muintir na Heireann
[People of Ireland]. Did I get it right?
[Applause] All right. It's difficult to ex-
press my appreciation to all of you. I
feel like I'm about to drown everyone in
a bath of nostalgia. Of all the honors
and gifts that have been afforded me as
President, this visit is the one that I will
cherish dearly. You see, I didn't know
much about my family background — not
because of lack of interest, but because
my father was orphaned before he was 6
years old. And now thanks to you and
the efforts of good people who have dug
into the history of a poor immigrant
family, I know at last whence I came.
And this has given my soul a new con-
tentment. And it is a joyous feeling. It is
like coming home after a long journey.

You see, my father, having been or-
phaned so young, he knew nothing of his
roots also. And, God rest his soul, I told
the father, I think he's here too, today,
and very pleased and happy to know
that this is whence he came.

Robert Frost, a renowned American
poet, once said, "Home is the place,
where, when you have to go there, they
have to take you in." [Laughter] It's
been so long since my great-grandfather
set out that you don't have to take me
in. So, I'm certainly thankful for this
wonderful homecoming today. I can't
think of a place on the planet I would
rather claim as my roots more than
Ballyporeen, County Tipperary.

My great-grandfather left here in a
time of stress, seeking to better himself
and his family. From what I'm told, we
were a poor family. But my ancestors
took with them a treasure, an in-
domitable spirit that was cultivated in
the rich soil of this country.

And today I come back to you as a
descendant of people who are buried
here in paupers' graves. Perhaps this is
God's way of reminding us that we must
always treat every individual, no matter
what his or her station in life, with

President Reagan addresses the citizens of Ballyporeen, his ancestral home. Located at
the foot of the Knockmealdown-Kilworth Mountains in County Tipperary, Ballyporeen is
village in the heart of Ireland's dairyland.

dignity and respect. And who knows?
Someday that person's child or grand-
child might grow up to become the
Prime Minister of Ireland or President
of the United States.

Looking around town today, I was
struck by the similarity between
Ballyporeen and the small town in II-
lionis where I was born, Tampico. Of
course, there's one thing you have that
we didn't in Tampico. We didn't have a
Ronald Reagan Lounge in town.
[Laughter] The spirit is the same, this
spirit of warmth, friendliness, and open-
ness in Tampico and Ballyporeen, and
you make me feel very much at home.

What unites us is our shared
heritage and the common values of our
two peoples. So many Irish men and
women from every walk of life played a
role in creating the dream of America.
One was Charles Thompson, Secretary
of the Continental Congress, and who
designed the first Great Seal of the
United States. I'm certainly proud to be
part of that great Irish-American tradi-
tion. From the time of our revolution
when Irishmen filled the ranks of the
Continental Army, to the building of the
railroads, to the cultural contributions of
individuals like the magnificent tenor
John McCormack and the athletic
achievements of the great heavyweight
boxing champion John L. Sullivan — all
of them are part of a great legacy.

Speaking of sports, I'd like to take
this opportunity to congratulate an
organization of which all Irish men and
women can be proud, an organization
that this year is celebrating its 100th ai
niversary: the Gaelic Athletic Associa-
tion. I understand it was formed a hun-
dred years ago in Tipperary to foster
the culture and games of traditional
Ireland. Some of you may be aware the
I began my career as a sports broad-
caster, so I had an early appreciation f<
sporting competition. Congratulations t
all of you during this GAA centennial
celebration.

I also understand that not too far
from here is the home of the great Irisl
novelist Charles Joseph Kickham. The
Irish identity flourished in the United
States. Irish men and women proud of
their heritage can be found in every
walk of life. I even have some of them
my Cabinet. One of them traces his
maternal roots to Mitchellstown, just
down the road from Ballyporeen. And
he and I have almost the same name.
I'm talking about Secretary of the
Treasury Don Regan.

He spells it R-e-g-a-n. We're all of
the same clan, we're all cousins. I tried
to tell the Secretary one day that his
branch of the family spelled it that way
because they just couldn't handle as
many letters as ours could. [Laughter]

Department of State Bulleti

THE PRESIDENT

nd then I received a paper from
eland that told me that the clan to
bich we belong, that in it those who
id "Regan" and spelled it that way
ere professional people and the
lucators, and only the common
borers call it "Reagan." [Laughter] So,
eet a common laborer.

The first job I ever got — I was 14
ars old, and they put a pick and a
ovel in my hand and my father told
|e that that was fitting and becoming
one of our name.

The bond between our two countries

s deep and strong, and I'm proud to
here in recognition and celebration of
r ties that bind. My roots in
llyporeen, County Tipperary, are little
ferent than millions of other
mericans who find their roots in towns
id countries all over the Isle of Erin. I
st feel exceptionally lucky to have this
ance to visit you.

Last year a member of my staff
me through town and recorded some
essages from you. It was quite a tape,
id I was moved deeply by the sen-
nents that you expressed. One of your
wnsmen sang me a bit of a tune about
;an Tracy, and a few lines stuck in my
ind. They went like this — not that I'll
ig — "And I'll never more roam, from
y own native home, in Tipperary so
r away."

The Reagans roamed to America,
it now we're back. And Nancy and I
ank you from the bottom of our hearts
3 r coming out to welcome us, for the
armth of your welcome. God bless you

!
IS I

lublin,

firmer Toasts,
jne 3, 19845

•ime Minister FitzGerald

accordance with long-established
stom and given that it's expected of
, let me start on an historical note.
e are believed, outside this country, to
ways plunge back into the depths of
story. I'm going to do so, because in
e year 1029, King Reagan of Brega in-
cted a crushing defeat on the Vikings
Dublin. [Laughter]

The victor demanded as ransom for
e Viking King, Olaf Sitricson, the
llowing: 1,200 cows, 6 score Welsh
>rses — I don't know why Welsh — 60
inces of gold, 60 ounces of pure silver,
id all the "Irishmen of Leinster and of
le North" who were being held prisoner
Dublin on this very site, then the for-
ess of the Viking city.

ugust 1984

Fortunately for us FitzGeralds, we
didn't arrive for another 140 years—
[laughter]— when the Reagans, having in
the meantime failed in a bid for the
High Kinship of Ireland — you made it
on a second try, playing on a different
field — had become less powerful. And
fortunately for us, because I doubt if my
family could have bought themselves out
of a Reagan jail at that price. [Laughter]

We, the FitzGeralds, do, however,
owe the Reagans one important debt.
For it was one, Malachy Reagan, then
Latin secretary to a rather well-known
king of Leinster — whom I don't need to
and would prefer not to name — who
wrote to us inviting us over here in
1169. [Laughter] The Irish people 800
years later are, I need hardly tell you,
deeply grateful. [Laughter]

Your great grandfather and my
grandfather left for London from two
places divided 7 miles apart a century
and a quarter ago. They both married
Irish wives, in the very same church in
that city, Southwark Cathedral. And
thereafter their paths divided, bringing
us by very different routes to the leader-
ship of our respective governments.

Since they both left Ireland, much
has happened in this small country.
Much of it has been good. An indepen-
dent Irish State has come into existence
that is now respected by the nations of
the world. Literature in the English
language has since been transformed by
towering Irish figures such as Shaw and
Wilde, Yeats, and Joyce. And the grind-
ing poverty in which our people lived
three generations back has been re-
placed by a modest prosperity, as you
will have seen traveling through Mayo
and Galway and Tipperary and flying
over other counties.

This modest prosperity has not
marred the beauty and calm of our coun-
tryside, which continues to draw hun-
dreds of thousands of your compatriots
as welcome visitors to our shores.

Most significantly for the future, the
last decade has seen the growth in
Ireland of high technology industry— the
vast bulk of it the fruit of U.S. invest-
ment here, now in total amounting to
over $4 billion and employing one in six
of our manufacturing labor force.
Ireland's share of Europe's high tech-
nology activity is now totally dispropor-
tionate to our size and population. We
are well on the way to becoming a
silicon valley in Europe, as your in-
vestors match their inventiveness with
the special skills and enthusiasm of our
dynamic, well-educated laborforce — the
youngest in Europe.

There is, of course, another side to
this picture — one of heavy unemploy-
ment as the worldwide recession, now
lifting in your country, continues to take
its toll in Europe and, particularly, in
this island. And we also have our own
specific economic and financial problems.
We'll have an opportunity to discuss
some of these issues together tomorrow.

But worst of all, we have within this
island a conflict that threatens the peace
and stability of this corner of Europe,
one that has brought tragedy to
thousands of homes in Northern Ireland
and to many here, also, and in Britain.
This is a conflict of two traditions, two
identities in this island, but first and
foremost, within Northern Ireland.

You are aware of the work of the
New Ireland Forum, launched in this
great hall, and you have commented
supportively on it. The New Ireland
Forum made only one set of proposals in
its report. It used the word "proposes"
only once. It proposes, as necessary
elements of a framework within which a
new Ireland could emerge, a set of re-
quirements, a list of "musts," centered
on the need to accommodate each of the
two Irish traditions equally satisfactorily
in new structures. I'm deliberately avail-
ing of this important occasion to em-
phasize this point, because it has,
perhaps, not been fully understood.

The forum goes on to express the
belief— the belief, not the demand—
of nationalists that unity offers the best
solution and our further preference that
the particular form of unity we would
wish to see established is a unitary
state, achieved by agreement and con-
sent. That is our belief, our strong
preference; it is not a demand. We set
out our best arguments in favor of this
preference, but we also set out the
arguments in favor of two quite dif-
ferent alternatives that we considered: a
federal-confederal state and joint
authority. And most significantly of all,
we committed ourselves to being open to
discuss other views which may con-
tribute to political development.
Nothing, I believe, could be more open
than that approach.

The report of the New Ireland
Forum is, as I have said, an agenda, not
a blueprint. We know that you and our
European friends want, in an ap-
propriate way, to help to end this
tragedy. The people of Northern Ireland
have suffered far too much. They
deserve and they need our help and
yours.

THE PRESIDENT

You will forgive me for having dwelt
for some minutes on a problem that is so
close to our hearts, so ever-present to
our minds. It is, alas, only one of the
many problems of violence and threats
of violence in the world today — prob-
lems to which you and I will be turning
our thoughts together tomorrow
morning.

Dominating everything, of course, is
the issue of East- West relations, the
arms race, and, in particular, the
nuclear menace that threatens life on
this planet. Here, above all, as we have
indeed been discussing together the last
few minutes, there's an absolute need
for dialogue between the superpowers,
for the reopening of channels of com-
munication that have become clogged,
for the creation, if it can be achieved, of
the kind of trust and confidence upon
which alone world peace can be built.
We look forward to hearing you speak
on aspects of these problems to the joint
session of the Houses of Oireachtas
[Parliament] tomorrow.

Ireland is a small country with a
nightmare past. More than most people,
therefore, we are deeply concerned at
the violent tyranny that tears apart
small countries like Afghanistan, at the
repression that seeks to still the power-
ful instinct for freedom in Eastern Euro-
pean countries like Poland, and at the
deprivation of human rights in so many
countries of Latin America. With many
of these Latin American countries our
people have close emotional ties through
the work of our priests and nuns and lay
helpers there who seek to relieve the
poverty of the people and to give them
back their dignity of which they've been
deprived by oppressive regimes. Our
people's deep concern is that these prob-
lems be resolved peacefully by the peo-
ple of the region themselves — in Central
America, along the lines proposed by the
Contadora countries. In this connection,
I might add that many people in Ireland
have been most heartened by the news
of Secretary Shultz' visit to Nicaragua
on Friday last and hope that this may
lead to the restoration of normal rela-
tions between that small state and your
great country, thus enhancing the
climate for peace and democracy in that
troubled region.

In 4 weeks' time, Ireland takes over
the responsibilities of the Presidency of
the European Community. It will be our
task to bring to a conclusion the negotia-
tions to enlarge the community by ad-
mitting Spain and Portugal as members
and to complete the negotiations for the
new convention between the EEC and

the African, Caribbean, Indian Ocean,
and Pacific countries. We should also be
seeking during this presidency to secure
agreement to a more coherent organiza-
tion of the economic policies of our
member states so as to take fuller ad-
vantage of the recovery that has been
taking place in the United States. Hope-
fully, this task may be made somewhat
easier by the discussions that you will be
having with other major economic
powers in London this week.

There's another task we should also
tackle. Just as in our first Presidency of
the European Community in 1975, it fell
to me as President of the Council of
Ministers of the community to establish
and get working the new system of
political consultation between Europe
and America that had been decided upon
in the previous year, so in this new Irish
presidency we shall endeavor to recon-
cile economic differences between
Europe and America and to secure a
greater convergence of views on foreign
policy issues.

There are few tasks that the Irish
Government could look forward to with
as much enthusiasm or commitment.
After all, our own relations with your
great country are based first on human
considerations, on people, rather than on
the cold concerns of policy. It is on that
human dimension, on such old, enduring,
and unquenchable friendships that the
hope of our world can best rely today.

Your visit to your homeland has
reinforced and revitalized that precious
bond. I ask all here to raise their glasses
in a toast to the President of the United
States and Mrs. Reagan.

President Reagan

Nancy and I are delighted to be here in
the homeland of my ancestors and de-
lighted to be with all of you this eve-
ning. The magnificent green of your hills
and meadows, likewise, the warmth and
kindredship of your people during our
visit has touched us deeply. May I offer
in return a heartfelt thank you from
both Nancy and me.

Every American, even those not
lucky enough to be of Irish background,
has much to be grateful for in the Isle of
Erin. I think I have some firsthand
knowledge of this. You see, Nancy and I
reside in a house that was designed by
an Irishman. [Laughter]

We all know the Irish names and the
lists of their achievements in our
government, going all the way back to
our Revolutionary history. Not only have

*[»

Ireland's own had great impact on
America but the opposite has also been e
true.

The cross-pollination of American
and Irish liberty is truly an historic
phenomenon. Benjamin Franklin, a
preeminent influence on the course of
American democracy, visited here dur-
ing our Revolutionary period. As Prim
Minister FitzGerald pointed out to me
during his last visit to Washington, mo
than just a "couple" of American
Presidents — and one which I will not
mention — descend from this land.

On the other side of the coin, in-
dividuals significant to the developmen
of Irish liberty were much affected by
what was happening in America. Danie
O'Connell, a nationalist hero and a true
humanitarian, was influenced by our
great pamphleteer, Thomas Paine. Anc
the great parliamentarian, Charles
Stewart Parnell, journeyed to America
as a youth, a journey which may well
have colored his political views of the
world. And, of course, Eamon de
Valera, your third President, was actu;
ly born in the United States.

And yet, with our countries so clos
there are some influences we're not so
proud of. And I believe I speak for all
Americans of Irish descent who now
hold elected office when I join you in
condemning any misguided American
who supports terrorists in Northern
Ireland. I want to offer my thanks to
Prime Minister FitzGerald for his stror
stand on this issue. When he last visite
Washington, he articulated a message
conviction and courage and, by doing s
I'm sure has saved some innocent lives

Oscar Wilde had a comment on wa:
that is also applicable to terrorism. He
said, "When it is looked upon as vulgar
Wilde said, "it will cease to be popular.

The American people overwhelming
ly support peaceful efforts to reconcile
the differences between the two tradi-
tions on this island. We pray there will
be a new dawn, that it will come soon,
when both Catholics and Protestants in
Northern Ireland can live in the sunligr
of a peaceful and just society.

We're following, with keen interest,
the efforts that your government has
been making, and we wish you success.
We especially welcome the hard work
and thought that went into the New
Ireland Forum's report. We hope it will
strengthen Anglo-Irish cooperation in
resolving the Northern Ireland problem
through a peaceful reconciliation.

Ireland, even with this problem at
home, has been exerting an admirable
influence internationally. As peace-

|sfc
ei
ies
in

>d
I

Department of State Bulletir

THE PRESIDENT

epers, working within the structure of
e United Nations, you've taken great
iks for peace. Your bilateral develop-
ing assistance to less fortunate coun-
es is a tribute to your generosity and
ur humanitarianism, as is the personal
dication of Irish men and women
gaged in voluntary service throughout
e world.

Ireland has had an active and
spected role in the European Corn-
unity. We look forward to consulting
)sely with your government during
land's forthcoming presidency of the
iropean Community Commission,
eland has always promoted an open
id meaningful dialogue between the
lited States and the member states of
I e community, and I know we can
unt on a continuation of that fine and
ry practical tradition.

We respect Ireland's independent
urse in international affairs. We
spect Ireland's contributions, which
jre predicted by President Kennedy,
a maker and shaper of world peace.
in id we respect the democratic and
imanitarian values embodied in your
tions. Taoiseach [Prime Minister], our
ople have a common love of freedom
d a sense of decency that transcends
litical consideration. In many respects,
y journey here is a celebration of our
is and ideals, as well as of family,
ley are ties that secure our friendship
.d ensure our good will.

That Thomas Paine that I mentioned
moment ago said— and I think that all
us should take this to heart— said
> ■ at the opportunity is ours, we have it

our power to start the world over
T ;ain. And I think we share another
if : eal. What is our goal when we talk of
i eologies and philosophies? It is one,
•ry simple: the ultimate in individual
4 eedom consistent with an orderly
■ciety. That is our goal.

Ladies and gentlemen, please join
e in a toast to the Prime Minister of
eland.

At the dinner hosted by Prime Minister FitzGerald are (left to right) Secretary Shultz,
Mrs. FitzGerald, President Reagan, the Prime Minister, and Mrs. Reagan.

Irish Parliament,
June 4, 19846

I am fully cognizant of the great honor
that has been done me by your invitation
for me to speak here. [Applause] Thank
you.

And I can't help but say, I wonder if
there is an awareness in some that there
are countries in the world today where
representatives would not have been
able to speak as they have here.7

When I stepped off Air Force One
at Shannon a few days ago and saw
Ireland, beautiful and green and felt
again the warmth of its people,
something deep inside began to stir.

Who knows but that scientists will
someday explain the complex genetic
process by which generations seem to
transfer across time and even oceans
their fondest memories. Until they do, I
will have to rely on President Lincoln's
words about the "mystic chords of
memory"— and say to you that during
the past few days at every stop here in
your country, those chords have been
gently and movingly struck. So, I hope
you won't think it too bold of me to say
that my feelings here this morning can
best be summarized by the words
"home — home again."

I know some of us Irish Americans
tend to get carried away with our
ancestral past and want very much to
impress our relatives here with how well
we've done in the New World. Many of
us aren't back in Ireland 5 minutes
before, as the American song has it,

we're looking to shake the hand of Uncle
Mike and kiss the girl we used to swing
down by the garden gate. [Laughter]

I do want you to know that for
Nancy and me these last few days will
remain in our hearts forever. From
Shannon to Galway, to Ballyporeen to
Dublin, you have truly made us feel as
welcome as the flowers in May, and for
this we'll always be grateful to you and
to the Irish people.

Of course I didn't exactly expect a
chilly reception. As I look around this
chamber, I know I can't claim to be a
better Irishman than anyone here, but I
can perhaps claim to be an Irishman
longer than most any of you here.
[Laughter] There are those who just
refuse to let me forget that. [Laughter] I
also have some other credentials. I am
the great-grandson of a Tipperary man;
I'm the President of a country with the
closest possible ties to Ireland; and I
was a friend of Barry Fitzgerald.
[Laughter] One Irishman told me he
thought I would fit in. "Mr. President,"
he said, "you love a good story, you love
horses, you love politics— the accent we
can work on." [Laughter]

But I also came to the land of my
forebears to acknowledge two debts: to
express gratitude for a light heart and a
strong constitution; and to acknowledge
that well-spring of so much American
political success: the Blarney Stone. I
don't have to tell you how the Blarney
Stone works. Many times, for example, I
have congratulated Italians on
Christopher Columbus' discovery of

ugust 1984

THE PRESIDENT

America, but that's not going to stop me
from congratulating all of you on
Brendan the navigator. [Laughter]

I think you know, though, that
Ireland has been much in our thoughts
since the first days in office. I'm proud
to say the first Embassy I visited as
President was Ireland's, and I'm proud
that our Administration is blessed by so
many Cabinet members of Irish extrac-
tion. Indeed I had to fight them off Air
Force One or there wouldn't be anyone
tending the store while we're gone. And
that's not to mention the number of
Irish Americans who hold extremely im-
portant leadership posts today in the
U.S. Congress.

I can assure you that Irish
Americans speak with one voice about
the importance of the friendship of our
two nations and the bonds of affection
between us. The American people know
how profoundly Ireland has affected our
national heritage and our growth into a
world power. And I know that they
want me to assure you today that your
interests and concerns are ours and
that, in the United States, you have true
and fast friends.

Our visit is a joyous moment, and it
will remain so. But this should not keep
us from serious work or serious words.
This afternoon, I want to speak directly
on a few points.

I know many of you recall with
sadness the tragic events of last
Christmas: the five people killed and 92
injured after a terrorist bomb went off
in Harrods of London. Just the day
before, a Garda recruit, Gary Sheehan,
and Private Patrick Kelly, a young Irish
soldier with four children, were slain by
terrorist bullets. These two events, oc-
curring 350 miles apart — one in Ireland,
one in Britain — demonstrated the
pitiless, indiscriminate nature of ter-
rorist violence, a violence evil to its core
and contemptible in all its forms. And it
showed that the problems of Northern
Ireland are taking a toll on the people of
both Britain and Ireland, north and
south.

Yet the trouble in the north affects
more than just these two great isles.
When he was in America in March, your
Prime Minister courageously denounced
the support that a tiny number of
misguided Americans give to these ter-
rorist groups. I joined him in that
denunciation, as did the vast majority of
Irish Americans.

I repeat today, there is no place for
the crude, cowardly violence of ter-
rorism— not in Britain, not in Ireland,
not in Northern Ireland. All sides should
have one goal before them, and let us

state it simply and directly: to end the
violence, to end it completely, and to
end it now.

The terrorism, the sense of crisis
that has existed in Northern Ireland has
been costly to all. But let us not
overlook legitimate cause for hope in the
events of the last few months. As you
know, active dialogue between the
governments — here in Dublin, and in
London — is continuing. There's also the
constructive work of the New Ireland
Forum. The forum's recent report has
been praised. It's also been criticized.
But the important thing is that men of
peace are being heard and their message
of reconciliation discussed.

The position of the United States in
all of this is clear: We must not and will
not interfere in Irish matters nor
prescribe to you solutions or formulas.
But I want you to know that we pledge
to you our good will and support, and
we're with you as you work toward
peace.

I'm not being overly optimistic when
I say today that I believe you will work
out a peaceful and democratic reconcilia-
tion of Ireland's two different traditions
and communities. Besides being a land
whose concern for freedom and self-
determination is legendary, Ireland is
also a land synonymous with hope. It is
this sense of hope that saw you through
famine and war, that sent so many Irish
men and women abroad to seek new
lives and to build new nations, that gave
the world the saints and scholars who
prescribed Western culture, the mis-
sionaries and soldiers who spoke of
human dignity and freedom and put
much of the spark to my own country's
quest for independence and that of other
nations.

You are still that land of hope. It's
nowhere more obvious than in the
economic changes being wrought here. I
know Ireland faces a serious challenge
to create jobs for your population, but
you've made striking gains, attracting
the most advanced technology and in-
dustries in the world and improving the
standard of living of your people. And
you've done all of this while maintaining
your traditional values and religious
heritage, renewing your culture and
language, and continuing to play a key
role in the world community.

Based on Ireland's traditional
neutrality in international affairs, you
can be proud of your contribution to the
search for peace. Irish soldiers have
been part of eight UN peacekeeping
operations since you joined that
organization.

In the economic sphere, we
Americans, too, are proud that our
businesses have been permitted to pros
per in Ireland's new economic environ-
ment. As you know, there are more thai
300 American businesses here providing
between 35,000 and 40,000 jobs. We're
continuing to encourage this investment
And I assure you today that we will en-
courage even greater investment for the
future.

I think part of the explanation for
the economic progress you are making
here in Ireland can be found in your na
tion's historic regard for personal
freedom. Too often the link between
prosperity and freedom is overlooked. Ii
fact, it's as tight as ever. And it pro
vides a firm basis for increasing
cooperation, not only between our two
countries but among all countries of the
globe that recognize it.

Men and women everywhere in our
shrinking world are having the same ex-
perience. For most of mankind the
oceans are no longer the fearful
distances they were when my great-
grandfather, Michael Reagan, took
weeks to reach America. Some men and
women still set out with their children ii
small boats fleeing tyranny and depriva-
tion. For most of us, though, the oceans
and airways are now peaceful avenues,
thronged with ideas, people, and goods
going in every direction. They draw us
together. Slowly, but surely, more and
more people share the values of peace,
prosperity, and freedom which unite
Ireland and America.

In the last year, I've made two visits
to America's neighbors across the
Pacific in Asia. This century has brough
the Pacific nations many hardships, and
many difficulties and differences remain
But what I found everywhere was
energy, optimism, and excitement. Som*
nations in Asia have produced astound-
ing economic growth rates by providing
incentives that reward initiative by
unleashing freedom. More and more,
there is a sense of common destiny and
possibility for all the peoples of this
great region. The vast Pacific has
become smaller, but the future of those
who live around it is larger than ever
before.

Coming to Ireland, I sensed the
same stirring, the same optimism
toward a better future.

I believe that great opportunities do
lie ahead to overcome the age-old
menaces of disease and hunger and
want. But moments of great progress
can also be moments of great testing.
President Kennedy noted, when he was

re.
a
::

ro
nil

Department of State Bulletin

THE PRESIDENT

:»

re, that we live in a "most climactic
riod" but also, he said, "in the most
'ficult and dangerous struggle in the
story of the world." He was talking
5a out our century's struggle between the
•ces of freedom and totalitarianism — a
uggle overshadowed, we all know too
nt|;l], by weapons of awful destruction on
th sides.

Believe me, to hold the office that I
w hold is to understand, each waking
anient of the day, the awesome
sponsibility of protecting peace and
eserving human life. The responsibility
nnot be met with halfway wishes; it
n be met only by a determined effort
consolidate peace with all the
"ength America can bring to bear.

This is my deepest commitment; to
hieve stable peace, not just by being
epared to deter aggression but also by
suring that economic strength helps to
id the way to greater stability through
owth and human progress — being
epared with the strength of our com-
tment to pursue all possible avenues
r arms reduction; and being prepared
th the greatest strength of all, the
iritual strength and self-confidence
at enables us to reach out to our
versaries. To them, and to all of you
io have always been our dear and
asted friends, I tell you today from my
art, America is prepared for peace.

What we're doing now in American
reign policy is bringing an enduring
i sadiness, particularly in the search for
l ms reduction. Too often in the past,
i sought to achieve grandiose objec-
ts and sweeping agreements over-
gilt. At other times, we set our sights
low that the agreements, when they
1 ire made, permitted the numbers and
i tegories of weapons to soar. For ex-
i nple, our nation from the time of the
jning of the SALT II agreement until
e present added 3,950 warheads to its
senal. That might be arms limitation;
certainly isn't arms reduction. The
suit wasn't even arms control,
irough all of this, I'm afraid, differing
•oposals and shifting policies have
imetimes left both friends and adver-
tries confused or disconcerted.

And that's why we've put forward,
ethodically, one of the most extensive
•ms control programs in history. We
;lieve there can be only one policy, for
1 nations, if we are to preserve civiliza-
on in this modern age. A nuclear war
innot be won and must never be
>ught.

In five areas, we have proposed
lbstantive initiatives. In Vienna less
lan 2 months ago, the Western side put

ugust 1984

forward new proposals on reducing the
levels of conventional military forces in
Europe. In the same week in Geneva,
Vice President Bush put forward a draft
agreement for a worldwide ban on
chemical weapons, the gases that have
been used in Afghanistan and in Kam-
puchea. In Stockholm we're pursuing at
the Conference on Disarmament in
Europe a series of proposals that will
help reduce the possibility of conflict.
And in Geneva — as most of you are
aware — we have been participating, un-
til recently, in arms reductions talks on
two fronts: the START talks on reduc-
ing intercontinental nuclear forces, and
the INF talks, which deal with the issue
of intermediate-range missiles world-
wide. In addition, we're working to pre-
vent the spread of nuclear weapons and
to require comprehensive safeguards on
all nuclear exports.

During the months the START and
INF talks were underway, the United
States proposed seven different ini-
tiatives. None of these was offered on a
take-it-or-leave-it basis. Indeed, we made
a number of adjustments to respond to
the stated concerns of the Soviet side.
While Soviet flexibility did not match
our own, the Soviets also made some
steps of the kind required in any serious
negotiations. But then, after the first
deployment of intermediate-range
missiles here in Europe, the Soviets quit
the bargaining table.

This deployment was not something
we welcomed. It had been my hope, and
that of the European leaders, that
negotiations would make the deploy-
ments unnecessary. Unfortunately, the
Soviet stance in those talks left us no
alternative. Since 1977, while we were
not deploying, but urging the Soviets to
negotiate, they were deploying some 370
SS-20 missiles, capable of reaching
every city in every country in Europe.
We and our allies could not ignore this
threat forever.

But I believe today it is still possible
to reach an agreement. Let me assure
you that in both the START and INF
talks, we want to hear Soviet proposals;
we want them to hear our own; and
we're prepared to negotiate tomorrow if
the Soviets so choose. I'm prepared to
halt, and even reverse, the deployment
of our intermediate-range missiles from
Europe as the outcome of a verifiable
and equitable agreement. But for such
an outcome to be possible, we need to
have the Soviets return to the bargain-
ing table. And before this body, and the
people of Europe, I call on them to do
so.

Indeed, I believe we must not be
satisfied — we dare not rest, until the
day we've banished these terrible
weapons of war from the face of the
Earth forever.

My deepest hope and dream has
been that if once we can, together, start
down the road of reduction, we will in-
evitably see the common sense of going
all the way, so that our children and
grandchildren will not have to live with
that threat hanging over the world.

In addition to the arms control
negotiations, I want to stress today that
the United States seeks greater dialogue
in two other critical areas of East- West
relations. Just as we seek to reduce the
burden of armaments, we want to find,
also, ways to limit their use in trouble-
some or potentially difficult regional
situations. We seek serious discussions
with the Soviets to guard against
miscalcuation or misunderstanding in
troubled or strategically sensitive areas
of the world. I want to stress again to-
day the serious commitment of the
United States to such a process.

In the Stockholm conference I men-
tioned a moment ago, the United States
and 34 other nations are negotiating
measures to lessen East- West tensions
and reduce uncertainties arising from
military activities in Europe, the area
with the greatest concentration of
armed forces in the world. The 16 na-
tions of the Atlantic alliance have ad-
vanced concrete proposals which would
make conflict in Europe less likely. The
Soviet Union has not accepted these pro-
posals, but has focused upon a declara-
tion of the non-use of force.

Mere restatement of a principle all
nations have agreed to in the UN
Charter and elsewhere would be an in-
adequate conclusion to a conference
whose mandate calls for much more. We
must translate the idea into actions
which build effective barriers against the
use of force in Europe. If the Soviet
Union will agree to such concrete ac-
tions, which other countries in the
Stockholm conference already seem
prepared to accept, this would be an im-
portant step forward in creating a more
peaceful world.

If discussions on reaffirming the
principle not to use force, a principle in
which we believe so deeply, will bring
the Soviet Union to negotiate agree-
ments which will give concrete, new
meaning to that principle, we will gladly
enter into such discussion. I urge the
Soviet Union now to join all other coun-
tries in the Stockholm conference to

THE PRESIDENT

move promptly to take these steps which
will help ensure peace and stability in
Europe.

We seek to build confidence and
trust with the Soviets in areas of mutual
interest by moving forward in our
bilateral relations on a broad front. In
the economic field, we're taking a
number of steps to increase exchanges
in nonstrategic goods. In other areas,
we have for example, extended our very
useful incidents-at-sea agreement for
another term. And we've proposed
discussions for specific steps to expand
and multiply contacts of benefit to our
people. I might add here that the
democracies have a strong mutual
obligation to work for progress in the
area of human rights. And positive
Soviet steps in this area would be con-
sidered by the United States a signifi-
cant signal.

In summary then, we're seeking in-
creased discussion and negotiation to
reduce armaments, solve regional prob-
lems, and improve bilateral relations.
Progress on these fronts would enhance
peace and security for people every-
where.

I'm afraid the Soviet response has
been disappointing. Rather than join us
in our efforts to calm tensions and
achieve agreements, the Soviets appear
to have chosen to withdraw and to try
to achieve their objective through prop-
aganda rather than negotiations.

The Soviets seek to place the blame
on the Americans for this self-imposed
isolation. But they have not taken these
steps by our choice. We remain ready
for them to join with us and the rest of
the world community to build a more
peaceful world. In solidarity with our
allies, confident of our strength, we
threaten no nation. Peace and prosperity
are in the Soviet interest as well as in
ours. So let us move forward.

Steadiness in pursuing our arms
reductions initiatives and bettering East-
West relations will eventually bear fruit.
But steadiness is also needed in sustain-
ing the cause of human freedom.

When I was last in Europe, I spoke
about a crusade for freedom, about the
ways the democracies could inaugurate a
program promoting the growth of
democratic institutions throughout the
world. And now it is underway. And this
can have an impact in many ways in
many places and be a force for good.

Some, of course, focusing on the na-
tions that have lost their freedom in the
postwar era, argue that a crusade for
democratic values is impractical or
unachievable. But we must take the long

view. At the start of this century, there
were but few democracies. Today, there
are more than 50, comprising one-third
of the world's population. And it is no
coincidence — showing once again the
link between political, economic
freedom, and material progress — that
these nations enjoy the highest stand-
ards of living.

History is the work of free men and
women, not unalterable laws. It is never
inevitable, but it does have directions
and trends; and one trend is clear —
democracies are not only increasing in
number, they're growing in strength.
Today they're strong enough to give the
cause of freedom growing room and
breathing space, and that's all that
freedom ever really needs. "The mass of
mankind has not been born with saddles
on their backs." Thomas Jefferson said
that. Freedom is the flagship of the
future and the flashfire of the future. Its
spark ignites the deepest and noblest
aspirations of the human soul.

Those who think the Western
democracies are trying to roll back
history are missing the point. History is
moving in the direction of self-
government and the human dignity that
it institutionalizes, and the future
belongs to the free.

On this point of democratic develop-
ment, I think it is vital to appreciate
what has been happening in the Western
Hemisphere, particularly Latin America.
Great strides have been made in recent
years. In fact, 26 of 33 Latin American
countries today are democracies, or are
striving to become democracies. I think
it is also vital to understand that the
U.S. current program of assistance to
several Central American countries is
designed precisely to assist this spread
of democratic self-rule.

I know that some see the United
States, a large and powerful nation, in-
volved in the affairs of smaller nations
to the south, and conclude that our mis-
sion there must be self-seeking or in-
terventionist. The Irish people, of all
people, know Americans well. We strive
to avoid violence or conflict. History is
our witness on this point.

For a number of years at the end of
the last war, the United States had a
monopoly on nuclear weapons. We did
not exploit this monopoly for territorial
or imperial gain. We sought to do all in
our power to encourage prosperity and
peace and democracy in Europe. One
can imagine if some other countries,
possibly, had had these weapons instead
of the United States, would the world
have been as much at peace in the last
40 years as it has been.

■r-

m
i

In a few days in France, I will stano »
near the only land in Europe that is oc-
cupied by the United States — those
mounds of earth marked with crosses
and stars of David, the graves of
Americans who never came home, who
gave their lives that others might live in
freedom and peace. It is freedom and
peace that the people of Central
America seek today.

Three times in little more than 2
years, the people of El Salvador have
voted in free elections. Each time they
had to brave the threats of the guerrilla! ii
supported by the Sandinista regime in
Nicaragua and by Cuba and the Soviet
Union. These guerrillas use violence to
support their threats. Their slogan in
each one of those elections has been,
"Vote today and die tonight." Yet the
people of El Salvador — 1.4 million of
them — have braved ambush and gunfire
and trudged for miles to vote for
freedom and then stood in line for hours
waiting their turn to vote.

Some of our observers who went
down there — many of them going down
convinced that perhaps we were wrong
in what we are trying to do there —
came home converted. Some of them
came home converted by one woman
standing in the voting line — had been
there for hours. She had been shot. She
suffered from a rifle bullet. She refused
to leave the line for medical treatment
until she had had her opportunity to
vote. They came home convinced that
the people of El Salvador want
democracy.

All the United States is attempting
to do — with only 55 military advisers
and $474 million in aid, three-fourths of
which is ear-marked for economic and
social development — is give the
Salvadorans the chance they want for
democratic self-determination, without
outside interference. But this the
Government of Nicaragua has been
determined not to permit.

By their own admission, they've
been supplying and training the
Salvadoran guerrillas. In their own
country they have never held elections.
They have all but crushed freedom of
the press and moved against labor
unions, outlawed political freedoms, and
even sponsored mob action against
Nicaragua's independent human rights
commission and imprisoned its director.

Despite this repression, a hundred
thousand Nicaraguan Catholics attended
a rally on Good Friday this year to sup-
port their church, which has been
persecuted by the Sandinistas' com-
munist dictatorship. And the bishop has

Department of State Bulletin

THE PRESIDENT

™! iw written a pastoral letter citing this
* rsecution of the church by that
ivernment. And yet, even in our own
untry we didn't read anything of that
■monstration. Somehow word of it
dn't get out through the news channels
the world.

In a homily to 4,000 Nicaraguans
icked into Don Bosco Church several
eeks ago, the head of the Nicaraguan
shops Conference, Bishop Pablo
ntonio Vega, said, "The tragedy of the
icaraguan people is that we are living
ith a totalitarian ideology that no one
ants in this country." You may not
ive heard about this — again, as I say,
e words of Nicaraguan Archbishop
aando y Bravo. "To those who say that
e only course for Central American
iuntries is Marxism-Leninism, we
iristians must show another way. That
to follow Christ, whose path is that of
uth and liberty."

The vast majority of those now
ruggling for freedom in Nicaragua —
ntrary to what the Sandinistas would
ive the world believe — are good and
orthy people who did not like the
)moza dictatorship and who do not
ant the communist dictatorship. The
agedy is they haven't been given the
lance to choose.

The people of Nicaragua and El
ilvador have a right to resist the
ghtmare outside forces want to impose
1 them, just as they have the right to
•sist extremist violence from within
hether from the left or right. The
nited States must not turn its back on
ie democratic aspirations of the people
Central America.

Moreover, this is a worldwide strug-
e. The Irish orator James Philpot
jrran once said, "The condition upon
hich God hath given liberty to man is
ernal vigilance." And yes, military
rength is indispensable to freedom. I
ive seen four wars in my lifetime; none
' them came about because the forces
freedom were too strong.
In the moving words used by the
zechoslovak Charter 77 group just a
eek ago, in reply to supporters of
uclear disarmament in the West, they
lid, "Unlike you, we have personal ex-
erience of other, perhaps less con-
Dicuous, but no less effective means of
stroying civilization than those
epresented by thermonuclear war; some
f us, at the very least, prefer the risk
wolved in maintaining a firm stance
( gainst aggression to the certainty of
lie catastrophic consequences of ap-
easement."

The struggle between freedom and
totalitarianism today is not ultimately a
test of arms or missiles but a test of
faith and spirit. And in this spiritual
struggle, the Western mind and will is
the crucial battleground. We must not
hesitate to express our dream of
freedom; we must not be reluctant to
enunciate the crucial distinctions be-
tween right and wrong — between
political systems based on freedom and
those based on a dreadful denial of the
human spirit.

If our adversaries believe that we
will diminish our own self-respect by
keeping silent or acquiescing in the face
of successive crimes against humanity,
they're wrong. What we see throughout
the world is an uprising of intellect and
will. As Lech Walesa said: "Our souls
contain exactly the contrary of what
they wanted. They wanted us not to
believe in God, and our churches are
full. They wanted us to be materialistic
and incapable of sacrifices; we are anti-
materialistic, capable of sacrifice. They
wanted us to be afraid of the tanks, of
the guns, and instead we don't fear
them at all." Lech Walesa.

Let us not take the counsel of our
fears. Let us instead offer.the world a
politics of hope, a forward strategy for
freedom. The words of William
Faulkner, at a Nobel prize ceremony
more than three decades ago, are an elo-
quent answer to those who predict
nuclear doomsday or the eventual
triumph of the superstate. "Man will not
merely endure," Faulkner said, "he will
prevail . . . because he will return to the
old verities and truths of the heart. He
is immortal because, alone among
creatures, he has a soul, a spirit of com-
passion and sacrifice and endurance."

Those old verities, those truths of
the heart — human freedom under
God — are on the march everywhere in
the world. All across the world
today — in the shipyards of Gdansk, the
hills of Nicaragua, the rice paddies of
Kampuchea, the mountains of
Afghanistan — the cry again is liberty.
And the cause is the same as that
spoken in the chamber more than two
decades ago by a young American Presi-
dent, who said, "A future of peace and
freedom."

It was toward the end of his visit
here that John Fitzgerald Kennedy said,
"I am going to come back and see old
Shannon's face again." And on his last
day in Ireland, he promised, "I certainly
will come back in the springtime."

It was a promise left unkept, for a
spring that never came. But surely in

our hearts there is the memory of a
young leader who spoke stirring words
about a brighter age for mankind, about
a new generation that would hold high
the torch of liberty and truly light the
world.

This is the task before us: to plead
the case of humanity, to move the con-
science of the world, to march to-
gether— as in olden times — in the cause
of freedom.

Thank you again for this great
honor, and God bless you all.

Luncheon Toasts,
June 4, 19848

President Reagan

Nancy and I are delighted to welcome
you here this afternoon. We hope to
return the kind hospitality that has been
extended to us from the moment that
we set foot on this Emerald Isle. By the
way, I noted that this house has a Blue
Room, a Coral Room, and a Gold
Room — and that reminds me of the
White House back in Washington. As
you may have seen when you visited
Washington, Mr. Prime Minister, the
White House is a good home for an
Irishman, because every March 17th, I
can honor St. Patrick by spending all
day in the Green Room. [Laughter]

For Americans, the very mention of
Ireland holds a magical sense of allure.
It brings to mind images of green
pastures, rugged highlands, and wide
lakes — like Lough Conn, Corrib,
Killarney — images of a lovely village
square in Galway or the graceful
Georgian architecture here in Dublin.
Perhaps what strikes Americans most
when they visit Ireland is that yours is a
land of many faces — a face of rich and
unparalleled beauty, a face of a proud
and glorious past, and a face of a young
and bright and hopeful future.

More than eight centuries before
Columbus discovered the New World,
Irish monasteries were great centers of
faith and learning. Scholars from all
over Europe came here to study
theology, philosophy, Greek, and Latin.
Your ancestors created stunning il-
luminated manuscripts, including a book
many consider the most beautiful ever
made, the Book of Kells.

Today, you and your sons and
daughters are making Ireland young
again— young in your spirit of hope and
faith in the future; young in your deter-
mination to create new opportunities

Rugust 1984

THE PRESIDENT

President and Mrs. Hillery accompany President and Mrs. Reagan to Air Force One for
the latters' departure from Ireland.

and attract new technologies to help
your economy along. And you're young
in heart, ready to give and forgive, and
ready to reach out in goodness and
friendship and love.

Our own country, of course, remains
a young nation simply because it is a
young nation. Only a few centuries have
passed since the first settlers landed on
our eastern shores. And they and those
who followed them came from virtually
every nation on Earth. By 1900, nearly
4 million had come from Ireland alone.
They cleared the land, built towns,
established legislatures. They created a
new and distinctly American way of life,
and yet they continued to cherish
memories of their homelands. Today
Ireland and the United States share a
living bond: the many Irish people who
have cousins in America, and the 40
million Americans of Irish descent who
always keep a special place for this
island in our hearts.

Our two countries share a second
bond — a bond of fundamental beliefs
and enduring values. And as Ireland
works to foster international under-
standing in this troubled world, you'll
have the admiration, the respect, and
the support of the United States. We
pledge our unremitting effort for the
cause of peace with freedom and human
dignity.

As you may know, my own family
left Ireland for the United States more
than a hundred years ago. Some of the
people in our country say I was with
them. [Laugher] This homecoming to the
land of my ancestors has moved me
more deeply than I can say. And Nancy
and I, as we draw our visit to a close,
know that many Irish Americans who
can't be here today will watch from
home. They're with us in spirit and shar-
ing a deep affection for Ireland and its
people — an affection that's shared, as
well, by your great poet, or I should

say — he did share it when he wrote —
William Butler Yeats, when he wrote:
"Land of Heart's Desire, Where beauty .
has no ebb . . . But joy is wisdom, time
an endless song."

Would you please join me in a toast
to the President of Ireland, President
Hillery.

President Hillery

Somebody remarked to me that your
progress in Irish was so rapid that I
should begin my speech in Irish and that
you would understand it. [Laughter]9

I would like to thank you for your
kind words, for your invitation to Maeve
and to me to be here, and to thank you
and Mrs. Reagan for arranging this very,
happy occasion. I'm sure everybody here
would wish to thank you both personal-
ly, if time allowed, because for us it is a <
really happy occasion.

We will, when you have left, wonder
after your all too brief visit — we'll
reflect on the personal and official
reasons and aspects of your visit and
what made it such a success. And I
think I'd start off by saying that you
brought to us a cheerful atmosphere,
which Europe is badly in want of.

I suppose it's safe to say that if
anybody in the free world has cause to
look worried and overburdened, it's you.
And still you come among us with
courageous cheerfulness, showing us the
way you're going and assuring and
reassuring our people and the people of
the world. And I thank you for doing
that.

Your search for Irish roots has ob-
viously been an important consideration
for you and for us. It goes straight to
the heart of the relationship between
this country and the United States of
America. We have our friends and rela-
tions in your country, and you have
yours here.

You were here for the first time in
1948 as a private citizen, and you
returned in 1972 as Governor of Califor-
nia. Now, 12 years later you have come
again, this time as President of the
United States. It is not necessary for me
to say how much we welcome you.

We're not promoting the idea that
every American who comes to Ireland
three times will become President of the
United States — [laughter] — but some
among us are pointing to the wisdom of
letting young people in America know
that they cannot visit Ireland too early
or too often. In fact, inherited wisdom
has brought Ronald Reagan, Jr., here
twice already. [Laughter]

Department of State Bulletin

THE PRESIDENT

Your visit has consolidated the
lecial friendship which exists between
eland and the United States. Your
Je -esence among us testifies to that
>ecial friendship — a friendship which
is endured and grown and become
ore, not less, important with the
issage of time, and moving away from
ie original links of history. It is based
blood and kinship and reinforced by
ie bedrock of shared beliefs and ideals.

Ireland shares with the United
tates of America a profound respect
>r the rights of the individual, for the
riding worth of democracy, and for the
gnity of the human person. The tyran-
y of flying time compels me to omit
jference to very many aspects of our
iendship and ties at official and unof-
cial levels. Some, but not all have been
jferred to and recalled over the past 3
ays. Suffice it to say that the bonds
hich bind us are many and strong and
iduring.

The best guarantee of ensuring the
srmanence of such a happy relationship
in the best tradition of old friends —
to visit more often. With that in mind,
hope that you and Mrs. Reagan will
)on return to our shores. And you will,
t me assure you, receive Cead Mille
ailte [one hundred thousand welcomes].

I now ask those of you who are not
[r. and Mrs. Reagan — [laughter] — to
in with me in a toast to the President
f the United States of America.

At the Normandy Cemetery, Mrs. Reagan
places flowers at the graves of U.S. service-
men who died during the D-Day invasion.
More than 9,000 Americans are buried
here.

NORMANDY

Pointe du Hoc,
June 6, 198410

We're here to mark that day in history
when the Allied armies joined in battle
to reclaim this continent to liberty. For
4 long years, much of Europe had been
under a terrible shadow. Free nations
had fallen, Jews cried out in the camps,
millions cried out for liberation. Europe
was enslaved, and the world prayed for
its rescue. Here in Normandy the rescue
began. Here the Allies stood and fought
against tyranny in a giant undertaking
unparalleled in human history.

We stand on a lonely, windswept
point on the northern shore of France.
The air is soft, but 40 years ago at this
moment, the air was dense with smoke
and the cries of men, and the air was
filled with the crack of rifle fire and the
roar of cannon. At dawn, on the morn-
ing of the 6th of June, 1944, 225
Rangers jumped off the British landing
craft and ran to the bottom of these
cliffs. Their mission was one of the most
difficult and daring of the invasion: to
climb these sheer and desolate cliffs and
take out the enemy guns. The Allies had
been told that some of the mightiest of
these guns were here and they would be
trained on the beaches to stop the Allied
advance.

The Rangers looked up and saw the
enemy soldiers — the edge of the cliffs
shooting down at them with machine
guns and throwing grenades. And the
American Rangers began to climb. They
shot rope ladders over the surface of
these cliffs and began to pull themselves
up. When one Ranger fell, another
would take his place. When one rope
was cut, a Ranger would grab another
and begin his climb again. They climbed,
shot back, and held their footing. Soon,
one by one, the Rangers pulled them-
selves over the top, and in seizing the
firm land at the top of these cliffs, they
began to seize back the Continent of
Europe.

Two hundred and twenty-five came
here. After 2 days of fighting, only 90
could still bear arms.

Behind me is a memorial that sym-
bolizes the Ranger daggers that were
thrust into the top of these cliffs. And
before me are the men who put them
there.

These are the boys of Pointe du
Hoc. These are the men who took the
cliffs. These are the champions who

August 1984

THE PRESIDENT

helped free a continent. These are the
heroes who helped end a war.

Gentlemen, I look at you, and I
think of the words of Stephen Spender's
poem. You are men who in your "lives
fought for life . . . and left the vivid air
signed with your honor."

I think I know what you may be
thinking right now— thinking "we were
just part of a bigger effort; everyone
was brave that day." Everyone was. Do
you remember the story of Bill Millin of
the 51st Highlanders? Forty years ago
today, British troops were pinned down
near a bridge, waiting desperately for
help. Suddenly, they heard the sound of
bagpipes, and some thought they were
dreaming. They weren't. They looked up
and saw Bill Millin with his bagpipes,
leading the reinforcements and ignoring
the smack of the bullets into the ground
around him.

Lord Lovat was with him — Lord
Lovat of Scotland, who calmly an-
nounced when he got to the bridge,
"Sorry I'm a few minutes late," as if he'd
been delayed by a traffic jam, when in
truth he'd just come from the bloody
fighting on Sword Beach, which he and
his men had just taken.

There was the impossible valor of
the Poles who threw themselves be-
tween the enemy and the rest of Europe
as the invasion took hold, and the unsur-
passed courage of the Canadians who
had already seen the horrors of war on
this coast. They knew what awaited
them there, but they would not be de-
terred. And once they hit Juno Beach
they never looked back.

All of these men were part of a
rollcall of honor with names that spoke
of a pride as bright as the colors they
bore: the Royal Winnipeg Rifles,
Poland's 24th Lancers, the Royal Scots
Fusiliers, the Screaming Eagles, the
Yeoman of England's armored divisions,
the forces of Free France, the Coast
Guard's "Matchbox Fleet" and you, the
American Rangers.

Forty summers have passed since
the battle that you fought here. You
were young the day you took these
cliffs; some of you were hardly more
than boys, with the deepest joys of life
before you. Yet, you risked everything
here. Why? Why did you do it? What im-
pelled you to put aside the instinct for
self-preservation and risk your lives to
take these cliffs? What inspired all the
men of the armies that met here? We
look at you, and somehow we know the
answer. It was faith and belief; it was
loyalty and love.

President Mitterrand and President Reagan place WTeaths at the Ranger Monument at
Pointe du Hoc which is located on a cliff overlooking Omaha Beach. The monument was
erected by the French to honor the U.S. 2nd Ranger Battalion and was officially turned
over to the U.S. Government in 1979.

The men of Normandy had faith that
what they were doing was right, faith
that they fought for all humanity, faith
that a just God would grant them mercy
on this beachhead or on the next. It was
the deep knowledge — and pray God we
have not lost it — that there is a pro-
found, moral difference between the use
of force for liberation and the use of
force for conquest. You were here to
liberate, not to conquer, and so you and
those others did not doubt your cause.
And you were right not to doubt.

You all knew that some things are
worth dying for. One's country is worth
dying for, and democracy is worth dying
for, because it's the most deeply
honorable form of government ever
devised by man. All of you loved liberty.
All of you were willing to fight tyranny,
and you knew the people of your coun-
tries were behind you.

The Americans who fought here that
morning knew word of the invasion was
spreading through the darkness back
home. They felt in their hearts, though
they couldn't know in fact, that in
Georgia they were filling the churches at
4 a.m., in Kansas they were kneeling on
their porches and praying, and in
Philadelphia they were ringing the
Liberty Bell.

Something else helped the men of
D-Day: their rockhard belief that Prov-
idence would have a great hand in the
events that would unfold here; that God
was an ally in this great cause. And, so,
the night before the invasion, when
Colonel Wolverton asked his parachute
troops to kneel with him in prayer he
told them: "Do not bow your heads, but
look up so you can see God and ask His
blessing in what we're about to do." Also
that night, General Matthew Ridgway
on his cot, listening in the darkness for
the promise of God made to Joshua: "I
will not fail thee nor forsake thee."

These are the things that impelled
them; these are the things that shaped
the unity of the Allies.

When the war was over, there were
lives to be rebuilt and governments to be
returned to the people. There were na-
tions to be reborn. Above all, there was
a new peace to be assured. These were
huge and daunting tasks. But the Allies
summoned strength from the faith,
belief, loyalty, and love of those who fell
here. They rebuilt a new Europe
together.

There was first a great reconcilia-
tion among those who had been enemies,
all of whom had suffered so greatly. The
United States did its part, creating the
Marshall Plan to help rebuild our Allies

Department of State Bulletin

THE PRESIDENT

d our former enemies. The Marshall
Ian led to the Atlantic alliance — a

t great alliance that serves to this day as
Bur shield for freedom, for prosperity,
d for peace.

In spite of our great efforts and suc-
sses, not all that followed the end of
le war was happy or planned. Some
berated countries were lost. The great
adness of this loss echoes down to our
wn time in the streets of Warsaw,
J 'rague, and East Berlin. Soviet troops
f hat came to the center of this continent
I id not leave when peace came. They're
till there, uninvited, unwanted,
nyielding, almost 40 years after the
/ar. Because of this, allied forces still
tand on this continent. Today, as 40
ears ago, our armies are here for only
ne purpose — to protect and defend
emocracy. The only territories we hold
re memorials like this one and
raveyards where our heroes rest.

We in America have learned bitter
jssons from two World Wars: It is bet-
er to be here ready to protect the peace
han to take blind shelter across the sea,
ushing to respond only after freedom is
Dst. We've learned that isolationism
iever was and never will be an accept-
able response to tyrannical governments
*dth an expansionist intent.

But we try always to be prepared
or peace, prepared to deter aggression;
irepared to negotiate the reduction of
irms; and, yes, prepared to reach out
tgain in the spirit of reconciliation. In
ruth, there is no reconciliation we
vould welcome more than a reconcilia-
ion with the Soviet Union, so, together,
ve can lessen the risks of war, now and
orever.

It's fitting to remember here the
;jreat losses also suffered by the Russian
people during World War II: 20 million
Perished, a terrible price that testifies to
ill the world the necessity of ending
war. I tell you from my heart that we in
he United States do not want war. We
want to wipe from the face of the Earth
,he terrible weapons that man now has
in his hands. And I tell you, we are
eady to seize that beachhead. We look
for some sign from the Soviet Union
that they are willing to move forward,
that they share our desire and love for
peace, and that they will give up the
ways of conquest. There must be a
changing there that will allow us to turn
our hope into action.

We will pray forever that some day
that changing will come. But for now,
particularly today, it is good and fitting
to renew our commitment to each other,
to our freedom, and to the alliance that
protects it.

We are bound today by what bound
us 40 years ago, the same loyalties,
traditions, and beliefs. We're bound by
reality. The strength of America's allies
is vital to the United States, and the
American security guarantee is essential
to the continued freedom of Europe's
democracies. We were with you then;
we are with you now. Your hopes are
our hopes, and your destiny is our
destiny.

Here, in this place where the West
held together, let us make a vow to our
dead. Let us show them by our actions
that we understand what they died for.
Let our actions say to them the words
for which Matthew Ridgway listened: "I
will not fail thee nor forsake thee."

Strengthened by their courage,
heartened by their valor, and borne by
their memory, let us continue to stand
for the ideals for which they lived and
died.

Omaha Beach,
June 6, 198411

We stand today at a place of battle, one
that 40 years ago saw and felt the worst
of war. Men bled and died here for a
few inches of sand, as bullets and
shellfire cut through their ranks. About
them, General Omar Bradley later said,
"Every man who set foot on Omaha
Beach that day was a hero."

No speech can adequately portray
their suffering, the sacrifice, their hero-
ism. President Lincoln once reminded us
that through their deeds, the dead of
battle have spoken more eloquently for
themselves than any of the living ever
could. But we can only honor them by
rededicating ourselves to the cause for
which they gave a last full measure of
devotion.

Today we do rededicate ourselves to
that cause. And at this place of honor,
we're humbled by the realization of how
much so many gave to the cause of
freedom and to their fellow man.

Some who survived the battle of
June 6, 1944, are here today. Others
who hoped to return never did.

"Someday, Lis, I'll go back," said
Private First Class Peter Robert
Zanatta, of the 37th Engineer Combat
Battalion, and first assault wave to hit
Omaha Beach. "I'll go back, and I'll see
it all again. I'll see the beach, the bar-
ricades and the graves."

Those words of Private Zanatta
come to us from his daughter, Lisa

Zanatta Henn, in a heart-rending story
about the event her father spoke of so
often. "In his words, the Normandy in-
vasion would change his life forever,"
she said. She tells some of his stories of
World War II but says of her father,
"the story to end all stories was D-Day."

"He made me feel the fear of being
on that boat waiting to land. I can smell
the ocean and feel the seasickness. I can
see the looks on his fellow soldiers'
faces — the fear, the anguish, the uncer-
tainty of what lay ahead. And when they
landed, I can feel the strength and
courage of the men who took those first
steps through the tide to what must
have surely looked like instant death."

Private Zanatta's daughter wrote to
me, "I don't know how or why I can feel
this emptiness, this fear, or this deter-
mination, but I do. Maybe it's the bond I
had with my father. All I know is that it
brings tears to my eyes to think about
my father as a 20-year-old boy having to
face that beach."

The anniversary of D-Day was
always special for her family. And like
all the families of those who went to
war, she describes how she came to
realize her own father's survival was a
miracle: "So many men died. I know
that my father watched many of his
friends be killed. I know that he must
have died inside a little each time. But
his explanation to me was, You did
what you had to do, and you kept on go-
ing.' "

When men like Private Zanatta and
all our Allied forces stormed the beaches
of Normandy 40 years ago, they came
not as conquerors but as liberators.
When these troops swept across the
French countryside and into the forests
of Belgium and Luxembourg they came
not to take but to return what had been
wrongly seized. When our forces
marched into Germany, they came not
to prey on a brave and defeated people
but to nurture the seeds of democracy
among those who yearned to be free
again.

We salute them today. But, Mr.
President [Mitterrand], we also salute
those who, like yourself, were already
engaging the enemy inside your beloved
country — the French Resistance. Your
valiant struggle for France did so much
to cripple the enemy and spur the ad-
vance of the armies of liberation. The
French Forces of the Interior will
forever personify courage and national
spirit. They will be a timeless inspiration
to all who are free and to all who would
be free.

August 1984

THE PRESIDENT

Today, in their memory, and for all
who fought here, we celebrate the
triumph of democracy. We reaffirm the
unity of democratic peoples who fought
a war and then joined with the van-
quished in a firm resolve to keep the
peace.

From a terrible war we learned that
unity made us invincible; now, in peace,
that same unity makes us secure. We
sought to bring all freedom-loving na-
tions together in a community dedicated
to the defense and preservation of our
sacred values. Our alliance, forged in the
crucible of war, tempered and shaped by
the realities of the post-war world, has
succeeded. In Europe, the threat has
been contained, the peace has been kept.

Today, the living here assembled —
official, veterans, citizens — are a tribute
to what was achieved here 40 years ago.
This land is secure. We are free. These
things are worth fighting and dying for.

Lisa Zanatta Henn began her story
by quoting her father, who promised
that he would return to Normandy. She
ended with a promise to her father, who
died 8 years ago of cancer: "I'm going
there, Dad, and I'll see the beaches and
the barricades and the monuments. I'll
see the graves, and I'll put flowers there
just like you wanted to do. I'll feel all
the things you made me feel through
your stories and your eyes. I'll never
forget what you went through, Dad, nor
will I let anyone else forget. And, Dad,
I'll always be proud."

Eight heads of state gather at Utah Beach for the closing ceremony commemorating the
40th anniversary of the D-Day landing at Normandy. Left to right are Prime Minister
Trudeau (Canada), Queen Beatrix (Netherlands), King Olav V (Norway), King Baudouin
(Belgium), President Mitterrand (France), Queen Elizabeth II (United Kingdom), Grand
Duke Jean (Luxembourg), and President Reagan.

Through the words of his loving
daughter, who is here with us today, a
D-Day veteran has shown us the mean-
ing of this day far better than any Presi-
dent can. It is enough for us to say
about Private Zanatta and all the men of
honor and courage who fought beside
him four decades ago: We will always
remember. We will always be proud. We
will always be prepared, so we may
always be free.

'Texts from Weekly Compilation of
Presidential Documents of June 11, 1984.

2Made at the airport.

3Made in Quadrangle Square at the
university. Prior to his address, the President
received an honorary doctorate of law degree
from the National University, of which the
college at Galway is a part, and was
presented with the Freedom of the City and
a resolution scroll by Mayor Michael Leahy.

4Broadcast to the United States from
Ashford Castle in Cong, County Mayo, where
the President and Mrs. Reagan stayed during
their visit in Galway.

5Hosted by the Prime Minister in honor
of President Reagan in St. Patrick's Hall in
Dublin Castle.

6Made before a joint session of the Parlia-
ment in the Dail [House of Representatives]
at Leinster House.

'The President was referring to three
members of the National Parliament who pro-
tested the President's presence and left the
room after he was introduced by the Prime
Minister.

"Hosted by President Reagan in honor of
President Hillery at Deerfield, the residence
of the U.S. Ambassador to Ireland.

9President Hillery opened his remarks in
Irish.

10Made at the site of the U.S. Ranger
Monument where veterans of the Normandy
invasion had assembled for the anniversary.

"Made at the Omaha Beach Memorial. ■

Department of State Bulletin

THE VICE PRESIDENT

Vice President Bush Visits
East and South Asia
and the Middle East

Vice President Bush departed Washington, D.C.,

May 8, 1984, to visit Japan (May 8-10),

Indonesia (May 10-12), India (May 12-15),

Pakistan (May 15-18), and Oman (May 18-20).

He returned to Washington on May 20.

Following are the Vice President's statements,

toasts, and remarks he made on various

occasions during the trip.1

JAPAN

Tokyo,

Dinner Toast,
May 9, 19842

Six months ago, President Reagan and
Prime Minister [Yasuhiro] Nakasone met
here to renew a personal friendship and
to strengthen a national friendship. Both
men share a vision of U.S. -Japan bi-
lateral and global cooperation unham-
pered by the barrier of lingering trade
problems, and together they set a
demanding agenda for progress to
realize that vision.

In the succeeding 6 months, we have
witnessed an unprecedented chapter in
our relations: an almost unbroken period
of intense communication and close
cooperation marked by frequent per-
sonal consultations. I know, Mr. Foreign
Minister [Shintaro Abe], the important
role that you played in these negotia-
tions, and we are grateful to you for
your efforts.

We have made real and significant
progress. Still, much remains to be
done. Our work together is far from
complete. We must continue to build on
the gains we have already made to forge
new progress for the future.

In a relationship of the size and
scope of that between the United States
and Japan, there will always be prob-
lems to command our attention. But I
think we have demonstrated in this last
half year of negotiations that we have
the imagination and means to find solu-
tions to those difficulties as they arise.

In so many ways, our two countries are
providing the world with the promise of
a better future.

Finally, let me stress how highly my
country values its relationship with
Japan. Together we stand as engines of
prosperity in the world economy and
bulwarks in defense of freedom and
democratic values in a world too often
beset by tyranny. As President Reagan
said in his address to the Diet last year,
"Together, there is nothing Japan and
America cannot do."

I would like to propose a toast to
you, Mr. Foreign Minister, and to your
gracious and hospitable country, our
partner in prosperity and ally in
democracy.

Statement,
May 10, 19843

We have had a wonderful stay in Japan,
and it has been a great pleasure to meet
with my Japanese colleagues who have,
as always, proven to be the most
thoughtful and gracious of hosts.

My discussions with the Prime
Minister [Yasuhiro Nakasone], the
Foreign Minister [Shintaro Abe], Mr.
[Toshio] Komoto [Director General of
Economic Planning Agency] and other
distinguished leaders focused largely on

the follow-up process stemming from the
President's visit to Japan last
November.

Our meetings were extremely friend-
ly, and our discussions frank and to the
point. There was a clear recognition on
both sides of all that remains to be done.

We have accomplished much in the
last 6 months, but our work together in
resolving the difficult trade and
economic issues is far from complete.
I'm sure that if we approach the prob-
lems that remain in the same spirit of
cooperation that has marked our
negotiations so far, we will continue to
make progress; and the strong and vital
Japan-U.S. relationship will continue to
prosper.

I leave Japan today more convinced
than ever of the importance of that rela-
tionship to both of our great nations.

With Prime Minister Nakasone.

(White House photos by Dave Valdez)

August 1984

THE VICE PRESIDENT

INDONESIA

Jakarta,
Statement,
May 12, 19843

On the personal level, I leave with some
feeling of regret that I have had too lit-
tle time to see more of Indonesia. My
visit to Taman Mini yesterday brought
home to me the tremendous variety and
grandeur of this beautiful country.

But on an official level, during these
2 days of talks I have learned much and,
I think, we have accomplished much. In
excellent meetings with President
Soeharto, with Vice President Umar,
and with other senior officials of the
Government of Indonesia, I took every
opportunity to stress how much the
United States values our broad and
friendly ties with Indonesia.

I spent a good deal of time discuss-
ing with President Soeharto the subject
of East- West relations. I wanted to con-
vey to him President Reagan's deep and
abiding commitment to arms control and
listen to his views on these issues that
affect the peace of all mankind. Presi-
dent Reagan has proposed negotiations
in five vital areas with the Soviets. They
include proposals to limit strategic arms,
intermediate force missiles, mutual force
reductions, chemical warfare, and
confidence-building measures. I noted
that despite the fact that the Soviets
have rejected these efforts, President
Reagan is determined to push forward
in this important area.

I was also pleased to discuss with
President Soeharto President Reagan's
recent trip to China and stressed that
President Reagan sees improved rela-
tions with the People's Republic of China
as a progressive step designed to bring
stability to the world. I think it's impor-
tant to note that improved relations
with the People's Republic of China will
not come at the expense of our friend-
ship with the member nations of
ASEAN [Association of South East
Asian Nations].

I am grateful for President
Soeharto's views on these issues of im-
portance for peace in both the region
and the world. I will report what I have
heard to President Reagan upon my
return. President Soeharto will, I know,
convey the details of our discussion to
the other leaders of ASEAN when they
meet in Jakarta this coming July.

With President Soeharto.

I came here to learn; and thanks to
my very productive meetings, I did. I
learned much about what Indonesia,
under President Soeharto's leadership,
has accomplished in nationbuilding; and
I was extremely impressed with the
strides Indonesia has made in promoting
economic development.

As we leave today, I am confident
that relations between the United States
and Indonesia are stronger than at
anytime. It is our intention to work
jointly with the government of President
Soeharto to strengthen our friendship
even further in the months and years to
come.

Finally, I want to express my
sincere appreciation and that of my
wife, Barbara, and our entire traveling
party for the kindness that we have
been afforded during the past few days.
As I said at the very beginning, we have
seen too little of this beautiful country,
and I spent too little time here. We all
look forward to returning one day.

INDIA

New Delhi,
Dinner Toast,
May 12, 19844

In looking at the relationship between
India and the United States, I am im-
pressed by the many values our two
countries share. First, of course, is our
common heritage as two nations in the
forefront of the anti-colonial struggle.
We both know the pain and price of in-
dependence, and we both appreciate the
necessity of carefully guarding our hard-
won freedom.

It is significant, I believe, that in
both our countries national elelctions
will be held within the next few months.
Our common democratic traditions hold
our two nations in an enduring alliance
of the spirit — the vibrant, unbreakable
alliance of free men everywhere.

Closely related to our shared
democratic ideals is the pluralistic
nature of our two societies. The peoples
of both countries — so varied in ethnic,
linguistic, and cultural backgrounds —
have chosen to bind themselves together
through democratic institutions in order
to protect their diversity and their in-
dividual liberties.

Third, both societies value openness
of discussion and debate, whether in the
political arena or in a free press. Both
India and the United States know that
freedom of expression is the ultimate
guarantor of our survival as free and
proud peoples. We have seen too many
countries around the world stagnate anc
decay — both spiritually and econom-
ically— as freedom withered under press
censorship and state control.

Given all this that our two societies
have in common, some have asked why
there is not greater accord between In-
dia and the United States in the way we
look at the world. Let me say, first, that
I count myself among those who believe
there is no fundamental conflict between
the foreign policy objectives of the
United States and those of India. Each
of us, in our own way, seeks a better lift
for our people in a world at peace with
itself.

We do bring different perspectives
to bear on the problems of our planet.
Such differences are in the natural order
of things; and as open, democratic
societies which value the intellectual fer-
ment stimulated by the debate of ideas,
we should not confuse such debate with
irreconcilable differences nor give such
debate a greater importance than it
deserves.

Department of State Bulletin

THE VICE PRESIDENT

Let us take, for example, my coun-
ty's policy toward this region, South
sia. The United States supports a
astern of stable, peaceful, and pros-
erous South Asian states — states free
) choose their own system of govern-
lent and to exercise their rights as
)vereign, independent nations.

The United States recognizes the im-
ortant role of a strong India, whose
ell-established democratic institutions
elp it serve as an anchor of regional
tability.

Good relations between a strong,
ee, and united India and its neighbors
Iso contributes to regional stability and
le peaceful, economically progressing
outh Asia we seek. We have welcomed
fforts to increase regional cooperation,
s well as India's efforts to improve
ilateral relations with China and
akistan. India and its neighbors, ob-
iously, must determine the pace and
ath of the normalization process, but
ou should know that the United States
tands ready to support it in whatever
/ays we reasonably can.

In our view, the most destabilizing
actor to emerge in the region in recent
ears has been the brutal Soviet inva-
ion and continuing war against
Afghanistan. The presence of more than
00,000 Soviet troops in that country
.as fundamentally altered the strategic
ialance in the region and created the
vorld's largest refugee problem.

I look forward to discussing these
nd other matters with Prime Minister
Indira] Gandhi and her officials. India
md the United States have differences
vhich we are sensitive to, but our com-
non interests, which are grounded in a
■ommon commitment to democracy and
mman dignity, are larger and ultimately
nuch more important.

Ladies and gentlemen, I ask you to
oin me in a toast to Vice President
Mohammed] Hidayatullah and to the
Republic of India.

Statement,
JMay 15, 19843

My talks with Indian leaders have been
friendly, frank and, I think, productive.
Prime Minister [Indira] Gandhi was
especially gracious. We met together
privately for a full 2 hours and ex-
changed views on a far-ranging array of
global and regional issues. One can hard-
ly overestimate the importance of such

intimate discussions. I feel that I came
away from my meeting with Mrs.
Gandhi with a renewed appreciation of
the Indian perspective on the problems
that confront our world.

The United States and India
together possess the basis of a strong
and enduring friendship. Mutually
beneficial exchanges in the fields of
education, culture, and science are going
on between India and the United States
largely on a case-to-case basis. The Indo-
U.S. Joint Commission is actively in-
volved in these activities. I understand
that representatives of our Embassy and
the Government of India have had useful
discussions in recent months on how to
provide a more systematic framework
for such bilateral exchanges in the
future. These discussions will be con-
tinued further and will, we trust, be suc-
cessful.

In conclusion, I would like to
reiterate the firm commitment of the
United States to a strong and united In-
dia. We see India as a major, pivotal
power and a key element in a peaceful
and prosperous South Asia. We believe
India and its neighbors have a vital,
long-range interest in each other's
stability, and a stable South Asia is im-
portant to the world. For our part, we
will do what we can to help promote the
stability and peaceful prosperity of the
region.

I leave India extremely optimistic
that our two great democracies will con-
tinue to build an even stronger relation-
ship based on our common interests and
the many traditions and values we
share.

With Prime Minister Gandhi.

August 1984

PAKISTAN

Islamabad,
Arrival Statement,
May 15, 1984

I am delighted to be here. I come on
behalf of President Reagan and the
American people to reaffirm our coun-
try's support for a strong, stable, and in-
dependent Pakistan at peace with its
neighbors.

The United States shares with your
country an enduring commitment to the
security and stability of this region. And
we hope to continue to cooperate with
Pakistan's efforts to enhance its security
and to further its economic and social
development.

I have come here to listen and learn,
and to share views with the leaders of
your country on a variety of issues of
common interest. I look forward to
meeting with President Zia [General
Mohammad Zia-ul-Haq], Foreign
Minister [Sahabzada] Yaqub Khan, and
other senior officials, and to the oppor-
tunity to meet with your countrymen
here in Islamabad, Lahore, and
Peshawar.

In Peshawar I will have the oppor-
tunity to visit an Afghan refugee village
and learn more about the Afghan strug-
gle for freedom.

We believe that this visit will con-
tribute to a broader understanding and
reinforce the already strong ties that ex-
ist between our two nations.

Peshawar,
Remarks (excerpts)
at Afghan
Refugee Camp,
May 17, 1984

My dear Afghan brethren, I want to
thank you for your invitation to visit this
refugee village. To the officials of the
Pakistani Government and to the
representatives of the relief agencies, I
also want to say thank you for making
this visit possible.

I have today witnessed firsthand the
tragic results of the invasion of your
homeland. I have seen much suffering
here, much hardship and pain; but I
have also seen a courageous and proud
people who remain hospitable and
generous despite want — a strong and
noble people whose commitment to
freedom and faith in a loving God re-
mains undampened by adversity.

THE VICE PRESIDENT

With President Zia.

Across the border, a brutal war is
being waged against the people of
Afghanistan. Reports come out of that
tragic country of indiscriminate bombing
of civilian population centers, and
scorched earth tactics. These tactics are
laying waste to the land and creating
millions of homeless and thousands of
dead.

My dear Afghan brethren, you and
your people have suffered greatly. You
have shown courage and fortitude
beyond the usual measure. You have my
heartfelt admiration and that of my
countrymen. You have earned the ad-
miration of free men everywhere.

I have seen the indomitable spirit of
freedom living on in this refugee camp.
Your homeland, the proud nation of
Afghanistan, has never been conquered.
The bravery and independence of the
Afghan people is legend. Those who try
to deprive you of freedom and place you
in bondage will, I am convinced, learn
that the light of liberty that burns so
brightly in your valiant nation can never
be extinguished.

The Soviets must withdraw their
military machine and stop interfering in
the internal affairs of the sovereign na-
tion of Afghanistan. We do not want the
suffering to be prolonged — we want to
see a negotiated settlement as soon as

possible. But the critical issue remains
Soviet withdrawal. I know your resist-
ance will continue until the Soviets
realize they cannot subjugate
Afghanistan.

Before I leave, I would like to pay
tribute to the officials and citizens of
Pakistan who have welcomed over 3
million Afghan refugees into this coun-
try with such compassion and sacrifice. I
would also like to salute the workers
from all over the world who are here
with the relief agencies caring for the
refugees. The work you all do is obvious-
ly outstanding. I am also proud of the
American Government's contribution to
the relief program.

I am pleased to announce that as
part of our continuing effort to help the
Afghan refugees, I have brought with
me a check for $14 million from the peo-
ple of America to the people of
Afghanistan. And yesterday, a cargo
plane arrived bearing $1 million worth
of medical supplies, a sample of which
will be on display.

In this village, in the midst of
despair, survives hope. Deprived by
tyranny of all material things, the people
of Afghanistan fight for that most
precious possession of all — freedom.
Your cause is right, your cause is just. I
feel very privileged to be able to shake
your hands. Meeting you, I feel confi-
dent that the proud people of
Afghanistan will once again win back
their homeland — that the cause of
freedom will prevail.

Long live Afghanistan!

Lahore,
Statement,
May 18, 19843

I would like to take this opportunity to
publicly thank President Zia, who has
extended to us his warm and generous
hospitality for which we are most
grateful.

The chance I have had in these last
few days to travel to differrent parts of
Pakistan with President Zia has given
me an increased understanding of his
unique qualities as a leader and a
stronger admiration of this proud na-
tion.

In the last few days, as well, we
have had many valuable discussions with
the President and other top government
officials. The United States admires
Pakistan's constructive role in the
nonaligned movement and OIC
[Organization of the Islamic Conference]

and strongly supports its ongoing effort
to improve its relations with India. We
also welcome President Zia's plans to
bring about the return of more repre-
sentative government in Pakistan. Our
constructive talks about these and other
issues have conributed to a clearer
understanding of our respective posi-
tions that I'm sure will enhance our
already strong bilateral relations.

As you know, yesterday I visited an
Afghan refugee camp close by the
border. It was an experience I shall
never forget; and the suffering of those
proud, courageous people, fighting alom i»
against overwhelming odds — this is a
reality to which the world must never
close its eyes.

Great credit must be given the
Pakistani people for the humanitarian
assistance they are providing the
refugees. The extraordinary generosity
of the Pakistanis, who have opened up
the doors of their nation to their
homeless neighbors, deserves the praise
of compassionate people the world over.

Both the United States and Pakistai
want a just solution to the war in
Afghanistan based on the withdrawal of
Soviet forces, the restoration of
Afghanistan's independence and
sovereignty and the return with honor
of Afghanistan's millions of refugees.

OMAN

Muscat,
Statement,
May 19, 19843

With Sultan Qaboos.

My first visit to the Sultanate of Oman
has renewed my admiration for the
courage, energy, and determination of
His Majesty Sultan Qaboos [bin Said]
and the entire Omani people.

Department of State Bulletin

'effor

THE SECRETARY

My consultations with His Majesty
'Ultan Qaboos and his ministers have
nderscored the determination of our
wo countries to continue our joint ef-
3rts on behalf of international peace
't nd mutually valuable economic
rogress.

These talks have also underscored
he respect and friendship which have
or so long characterized the relations
W ai etween the Sultanate of Oman and the
Jnited States. President Reagan and I
re proud of our close relationship with
iwi lis Majesty Sultan Qaboos. We consider
do im to be an inspiring leader, a
I tatesman whose advice we seek and
»S emember and, above all, a friend. As
his visit has shown so well, His Majesty
,nd his people are also warm and
an ;enerous hosts to friends like ourselves

I'ho journey here from afar.
sity As regards the developments in the
| ^ilf, we are, of course, paying very
lose attention. The recent attacks
w gainst neutral shipping on the high seas
re in violation of international law and
ihould be a source of very great concern
jo all nations. We deplore the loss of life
( tnd property and would hope that the
wo belligerents reconsider this perilous
•oad they are moving down. In fact, I
hink the whole world would welcome an
:nd to the fighting which has gone on
oo long, wasted too many lives, and
irofits no one.

'Texts from the Vice President's Office of
he Press Secretary.

2Made at dinner hosted by Foreign
vlinister Shintaro Abe.

^3Made at a news conference.
"Made at dinner hosted by Vice President
ohammad Hidayatullah. ■

Terrorism: The Problem
and the Challenge

Secretary Shultz's statement before
the House Foreign Affairs Committee on
June IS, 198J,.1

I welcome this opportunity to discuss
with you the problem of international
terrorism and the challenges it poses to
our country. This subject was discussed
thoroughly at the recent meeting in
London of heads of state and govern-
ment and by their foreign ministers. A
declaration was issued on June 9 which
my staff has made available to you. In
that declaration, the leaders ". . . ex-
pressed their resolve to combat this
threat by every possible means,
strengthening existing measures and
developing effective new ones." One of
the points in that declaration called on
each country to close gaps in its national
legislation, and that is one of the
reasons for my appearance today. First,
however, I want to discuss with you the
problem in general and why it is of such
growing concern to the President and
me.

Terrorism has been a growing prob-
lem since 1968 when our Ambassador to
Guatemala was assassinated. Terrorist
incidents reached a plateau in number in
1979. The number of recorded attacks
has not varied significantly since then.
In 1983 there were more than 500 at-
tacks by international terrorists of which
more than 200 were against the United
States. This was only the tip of the ice-
berg because there were at least as
many threats and hoaxes. These are a
cheap way to create an atmosphere of
fear, and they also absorb a substantial
amount of our resources as well as those
of the host governments. Beyond this
are national or indigenous terrorist ac-
tivities which probably exceed by a fac-
tor of 100 what we define as interna-
tional terrorism.

This problem is not confined to any
geographic area. Fortunately, inside the
United States we experience relatively
few incidents. The problem for the
United States is primarily in other areas
of the world. The largest number of in-
cidents overall and against the United
States occurs in Europe followed by
Latin America and the Middle East.

Why Are We So Concerned?

Let me summarize briefly.

• In 1983 more Americans were
killed and injured by acts of terrorism
than in the 15 preceding years for which
we have records.

• The attacks in 1983 were unique
in the sheer violence of them. From our
point of view, the worst tragedies were
the destruction of our Embassy and the
Marine barracks in Beirut and of our
Embassy annex in Kuwait. But we were
not the only victims. There was the
bombing at Harrods in London, the
bombing at Orly airport in Paris, the
murder of four members of the South
Korean Cabinet in Rangoon, the bomb-
ing destruction of a Gulf Air flight in
one of the emirates, and others.

• Closely tied to the rising violence
has been the indiscriminate targeting of
innocents — people who have no known
role in either causing or redressing the
alleged grievances of the terrorists.

• A source of growing concern is
the extensive travel of terrorists outside
their own countries and regions to com-
mit acts of terror abroad. Again, intelli-
gence tells us that this occurs extensive-
ly in the Middle East, Europe, and Latin
America, but reports are increasing of
such travel to the United States. And
we also know that some Americans are
engaged in supporting the terrorist ac-
tivities of foreign states and groups that
engage in terrorism.

• The most disturbing trend of all is
the extent to which the agencies of
foreign states are engaged in terrorist
acts. Seventy or more incidents in 1983
probably involved significant state sup-
port or participation. No longer the ran-
dom acts of isolated groups of local
fanatics, terrorism is now a method of
warfare, no less because it is undeclared
and even (though not always) denied.

• Some 40% of all the incidents and
a large proportion of all the threats and
hoaxes are aimed at the United States—
our diplomats, members of our Armed
Forces, our businessmen, or other
Americans.

We are now faced with a problem
which is of major and growing signifi-
cance. The problem is not only repre-
sented by the grim statistics but by the
threat that terrorism represents to

August 1984

THE SECRETARY

civilized life. The main target of ter-
rorists is not just individuals but the
basic interests and values of the
democracies. It is a form of low-level
warfare directed primarily at Western
nations and institutions and their friends
and allies. We are the targets because
our belief in the rights of the individual
is an obstacle to those who wish to im-
pose their will on others. And it is pre-
cisely because the democratic nations
respect the rights of the individual and
maintain the most open and responsive
societies that they are so vulnerable to
terrorists. The goal of the terrorist is to
create anarchy and disorder, for it is out
of disorder that he hopes to instill fear,
discredit governments, demoralize
societies, or alter national policies.

What Are We Doing About It?

We are working with our closest allies
to develop a consensus on how we deal
with international terrorism and the
security problems it presents for us. The
consensus embodied in the declaration in
London on June 9 is heartening. In
earlier summit meetings we had ad-
dressed specific issues such as aircraft
hijacking and protection of our
diplomats. We have made considerable
progress in these areas. But on this oc-
casion we discussed the basic political
problem of states engaging in terrorism,
and we ackowledged the international
character of the problem. We noted that
in our respective countries we have gaps
in legislation for combating terrorism.

The legislation before the Congress
today will not fill all those gaps for the
United States, but it will fill some of
them. Part of the legislation we have
proposed is to implement two interna-
tional conventions that the Senate has
previously approved. These are relative-
ly noncontroversial, but it is time to get
the job done. The two other bills now
before this committee deal with areas of
law where we feel that legislative im-
provements can help in the fight against
terrorism. We welcome this opportunity
to work with the Congress in finding the
best legislative answers possible to the
complex questions that terrorism poses.
The draft of the bill on training and sup-
port services has been modified
significantly to take account of congres-
sional comments.

We are working in this Administra-
tion to review and apply the whole
range of options available. We do not
have any single answer that we think
will work all the time. What we must
do, therefore, is attack the problem on
many different fronts.

• We have organized ourselves bet-
ter within the executive branch to deal
with these problems. Within the Depart-
ment of State the responsibility for
policy, planning, and operations on these
matters has been consolidated in the Of-
fice of the Under Secretary for Manage-
ment. The policy and planning for the
Department as well as the government
in general is the task of the Director of
the Office for Counterterrorism and
Emergency Planning while the opera-
tions are in the Office of Security.

• We have added more resources to
intelligence collection, and we have
strengthened cooperation with other
governments. We have also streamlined
our procedures for advising our posts
abroad of threats and analysis of their
security problems. We believe that this
procedure is now working much better.
We believe that we need to do more.

• We have stepped up our training
and are also conducting exercises for
our personnel overseas on the types of
terrorist incidents they might have to
deal with. We have, for example, added
segments in every appropriate course at
the Foreign Service Institute on how to
deal with such problems.

• The Congress approved last year
a program which will permit us to train
foreign law enforcement officers on how
to deal with terrorist acts. We are ac-
tively engaged in implementing that pro-
gram. Although this program is de-
signed to help other governments deal
with these problems as it affects them,
it should also improve considerably the
response from other governments when
we need help at one of our posts.

• We are carrying out security en-
hancement programs at all of our high-
threat posts. We appreciate greatly the
consistent support we have received
from this committee in that effort.

• We have also taken steps to im-
prove our ability to respond when in-
cidents occur overseas. We have teams
available to assist on crisis management,
security, communications, and other
matters.

• The cooperation of other govern-
ments often depends on how responsive
we are on the security problems their
diplomatic missions may have in the
United States. The Congress has ap-
proved legislation which will assure that
we have a comprehensive program to
protect foreign officials, not only in
Washington and New York City but
other places in the United States. We
are seeking funds for that program in
the current budget.

• Finally, we are actively seeking to
improve our capability to prevent at-
tacks against our interests abroad. The
London summit declaration discussed,
among other things, "closer cooperation
and coordination between police and
security organizations and other rele-
vant authorities, especially in the ex-
changes of information, intelligence and
technical knowledge." And within the
U.S. Government we are continuing to
study other ways and means of deter-
ring or preemptively dealing with a
range of terrorist threats in conformity
with existing law.

The legislation before you represents
modest but necessary steps. They are
essential steps because the problem will
not go away: this is certainly not the
last you will hear about the problem of
terrorism.

But we need your help. The Presi-
dent and the Congress owe it to this
country to do whatever is necessary to
protect our people, our interests, and
our most basic principles.

'Press release 154. The complete
transcript of the hearings will be published
by the committee and will be available from
the Superintendent of Documents, U.S.
Government Printing Office, Washington,
D.C. 20402. ■

Department of State Bulletin

THE SECRETARY

Terrorism: The Challenge
o the Democracies

Secretary Shultz's address before the
Jonathan Institute's second Conference
m International Terrorism on June 2U,
98U-1

'ive years have passed since the
onathan Institute held its first con-
erence on terrorism, and in that time
he world has seen two major develop-
gj nents: one a cause for great distress;
he other a reason for hope.

The distressing fact is that over
hese past 5 years terrorism has in-
reased. More people were killed or in-
ured by international terrorists last
'ear than in any year since governments
>egan keeping records. In 1983 there
vere more than 500 such attacks, of
vhich more than 200 were against the
Jnited States. For Americans the worst
ragedies were the destruction of our
Embassy and then the Marine barracks
n Beirut. But around the world, many
)f our close friends and allies were also
rictims. The bombing of Harrods in Lon-
lon, the bombing at Orly Airport in
aris, the destruction of a Gulf Air
light in the United Arab Emirates, and
he Rangoon bombing of South Korean
>fficials are just a few examples— not to
•nention the brutal attack on a West
Jerusalem shopping mall this past April.

Even more alarming has been the
-ise of state-sponsored terrorism. In the
oast 5 years more states have joined the
-anks of what we might call the "League
i>f Terror," as full-fledged sponsors and
supporters of indiscriminate — and not so
ndiscriminate— murder. Terrorist at-
tacks supported by what [Libyan
leader] Qadhafi calls the "holy alliance"
3f Libya, Syria, and Iran, and attacks
sponsored by North Korea and others,
have taken a heavy toll of innocent lives.
Seventy or more such attacks in 1983
probably involved significant state sup-
port or participation.

As a result, more of the world's peo-
ple must today live in fear of sudden and
unprovoked violence at the hands of ter-
rorists. After 5 years, the epidemic is
spreading and the civilized world is still
groping for remedies.

Nevertheless, these past 5 years
have also given us cause for hope.
Thanks in large measure to the efforts
of concerned governments, citizens, and
groups like the Jonathan Institute, the
peoples of the free world have finally
begun to grapple with the problem of

August 1984

terrorism in intellectual and in practical
terms. I say intellectual because the first
step toward a solution to any problem is
to understand that there is a problem
and then to understand its nature. In re-
cent years we have learned a great deal
about terrorism, though our education
has been painful and costly. We know
what kind of threat international ter-
rorism poses to our free society. We
have learned much about the terrorists
themselves, their supporters, their
targets, their diverse methods, their
underlying motives, and their eventual
goals.

Armed with this knowledge we can
focus our energies on the practical
means for reducing and eventually
eliminating the threat. We can all share
the hope that, when the next conference
of this institute is convened, we will look
back and say that 1984 was the turning
point in our struggle against terrorism,
that having come to grips with the prob-
lem we were able to deal with it effec-
tively and responsibly.

The Anatomy of Terrorism

Let me speak briefly about the anatomy
of terrorism. What we have learned
about terrorism, first of all, is that it is
not random, undirected, purposeless
violence. It is not, like an earthquake or
a hurricane, an act of nature before
which we are helpless. Terrorists and
those who support them have definite
goals; terrorist violence is the means of
attaining those goals. Our response must
be twofold: we must deny them the
means but above all we must deny them
their goals.

But what are the goals of terrorism?
We know that the phenomenon of ter-
rorism is actually a matrix that covers a
diverse array of methods, resources, in-
struments, and immediate aims. It ap-
pears in many shapes and sizes — from
the lone individual who plants a home-
made explosive in a shopping center, to
the small clandestine group that plans
kidnapings and assassinations of public
figures, to the well-equipped and well-
financed organization that uses force to
terrorize an entire population. Its stated
objectives may range from separatist
causes to revenge for ethnic grievances
to social and political revolution. Inter-
national drug smugglers use terrorism

to blackmail and intimidate government
officials. It is clear that our responses
will have to fit the precise character and
circumstances of the specific threats.
But we must understand that the
overarching goal of all terrorists is the
same: with rare exceptions, they are at-
tempting to impose their will by
force — a special kind of force designed
to create an atmosphere of fear. And
their efforts are directed at destroying
what all of us here are seeking to build.
They're a threat to the democracies.

The Threat to the Democracies

The United States and its democratic
allies are morally committed to certain
ideals and to a humane vision of the
future. In our foreign policies, we try to
foster the kind of world that promotes
peaceful settlement of disputes, one that
welcomes change without violent con-
flict. We seek a world in which human
rights are respected by all governments,
a world based on the rule of law. We
know that in a world community where
all nations share these blessings, our
own democracy will flourish, our own
nation will prosper, and our own people
will continue to enjoy freedom.

Nor has ours been a fruitless search.
In our lifetime, we have seen the world
progress, though perhaps too slowly,
toward this goal. Civilized norms of con-
duct have evolved, even governing rela-
tions between adversaries. Conflict per-
sists; but, with some notorious excep-
tions, even wars have been conducted
with certain restraints — indiscriminate
slaughter of innocents is widely con-
demned; the use of certain kinds of
weapons has been proscribed; and most,
but not all, nations have heeded those
proscriptions.

We all know that the world as it ex-
ists is still far from our ideal vision. But
today, even the progress that mankind
has already made is endangered by
those who do not share that vision —
who, indeed, violently oppose it.

For we must understand, above all,
that terrorism is a form of political
violence. Wherever it takes place, it is
directed in an important sense against
us, the democracies — against our most
basic values and often our fundamental
strategic interests. The values upon
which democracy is based — individual
rights, equality under the law, freedom
of thought and expression, and freedom
of religion — all stand in the way of those
who seek to impose their will, their
ideologies, or their religious beliefs by
force. A terrorist has no patience and no
respect for the orderly processes of

THE SECRETARY

democratic society, and, therefore, he
considers himself its enemy.

And it is an unfortunate irony that
the very qualities that make democracies
so hateful to the terrorists also make
them so vulnerable. Precisely because
we maintain the most open societies,
terrorists have unparalleled opportunity
to strike against us.

Terrorists and Freedom Fighters

The antagonism between democracy and
terrorism seems so basic that it is hard
to understand why so much intellectual
confusion still exists on the subject. We
have all heard the insidious claim that
"one man's terrorist is another man's
freedom fighter." Let me read to you
the powerful rebuttal that was stated
before your 1979 conference by a great
American, Senator Henry Jackson, who,
Mr. Chairman, as you observed, is very
much with us.

The idea that one person's "terrorist" is
another's "freedom fighter" cannot be sanc-
tioned. Freedom fighters or revolutionaries
don't blow up buses containing non-combat-
ants; terrorist murderers do. Freedom fighters
don't set out to capture and slaughter school
children; terrorist murderers do. Freedom
fighters don't assassinate innocent business-
men, or hijack and hold hostage innocent
men, women, and children; terrorist
murderers do. It is a disgrace that democ-
racies would allow the treasured word
"freedom" to be associated with acts of ter-
rorists.

Where democracy is struggling to
take root, the terrorist is, again, its
enemy. He seeks to spread chaos and
disorder, to paralyze a society. In doing
so he wins no converts to his cause; his
deeds inspire hatred and fear, not
allegiance. The terrorist seeks to under-
mine institutions, to destroy popular
faith in moderate government, and to
shake the people's belief in the very idea
of democracy. In Lebanon, for example,
state-sponsored terrorism has exploited
existing tensions and attempted to pre-
vent that nation from rebuilding its
democratic institutions.

Where the terrorist cannot bring
about anarchy, he may try to force the
government to overreact, or impose
tyrannical measures of control, and
hence lose the allegiance of the people.
Turkey faced such a challenge but suc-
ceeded in overcoming it. Martial law was
imposed; the terrorist threat was
drastically reduced; and today we see
democracy returning to that country. In
Argentina, the widely and properly
deplored "disappearances" of the 1970s
were, in fact, part of a response — a

deliberately provoked response — to a
massive campaign of terrorism. We are
pleased that Argentina, too, has re-
turned to the path of democracy. Other
countries around the world face similar
challenges, and they, too, must steer
their course carefully between anarchy
and tyranny. The lesson for civilized na-
tions is that we must respond to the ter-
rorist threat within the rule of law, lest
we become unwitting accomplices in the
terrorist's scheme to undermine civilized
society.

Once we understand terrorism's
goals and methods, it is not too hard to
tell, as we look around the world, who
are the terrorists and who are the free-
dom fighters. The resistance fighters in
Afghanistan do not destroy villages or
kill the helpless. The contras in
Nicaragua do not blow up school buses
or hold mass executions of civilians.

How tragic it would be if democratic
societies so lost confidence in their own
moral legitimacy that they lost sight of
the obvious: that violence directed
against democracy or the hopes for
democracy lacks fundamental justifica-
tion. Democracy offers mechanisms for
peaceful change, legitimate political com-
petition, and redress of grievances. But
resort to arms in behalf of democracy
against repressive regimes or move-
ments is, indeed, a fight for freedom,
since there may be no other way that
freedom can be achieved.

The free nations cannot afford to let
the Orwellian corruption of language
hamper our efforts to defend ourselves,
our interests, or our friends. We know
the difference between terrorists and
freedom fighters, and our policies reflect
that distinction. Those who strive for
freedom and democracy will always have
the sympathy and, when possible, the
support of the American people. We will
oppose guerrilla wars where they
threaten to spread totalitarian rule or
deny the rights of national independence
and self-determination. But we will op-
pose terrorists no matter what banner
they may fly. For terrorism in any cause
is the enemy of freedom.

The Supporters of Terrorism

If freedom and democracy are the
targets of terrorism, it is clear that
totalitarianism is its ally. The number of
terrorist incidents in or against totali-
tarian states is negligible. States that
support and sponsor terrorist actions
have managed in recent years to co-opt
and manipulate the phenomenon in pur-
suit of their own strategic goals.

It is not a coincidence that most acts
of terrorism occur in areas of impor-
tance to the West. More than 80% of the
world's terrorist attacks in 1983 oc-
curred in Western Europe, Latin
America, and the Middle East. The re-
cent posture statement of the Joint
Chiefs of Staff put it this way:

Terrorists may or may not be centrally
controlled by their patrons. Regardless, the
instability they create in the industrialized
West and Third World nations undermines
the security interests of the United States
and its allies.

States that sponsor terrorism are
using it as another weapon of warfare,
to gain strategic advantage where they
cannot use conventional means. When
Iran and its allies sent terrorists to
bomb Western personnel in Beirut, they
hoped to weaken the West's commit-
ment to defending its interests in the
Middle East. When North Korea spon-
sored the murder of South Korean
Government officials, it hoped to weaken
the noncommunist stronghold on the
mainland of East Asia. The terrorists
who assault Israel are also enemies of
the United States. When Libya and the
Palestine Liberation Organization pro-
vide arms and training to the com-
munists in Central America, they are
aiding Soviet efforts to undermine our
security in that vital region. When the
Soviet Union and its clients provide
financial, logistic, and training support
for terrorists worldwide; when the Red
Brigades in Italy and the Red Army
faction in Germany assault free coun-
tries in the name of communist
ideology— they hope to shake the West's
self-confidence and sap its will to resist
aggression and intimidation. And we are
now watching the Italian authorities un-
ravel the answer to one of the great
questions of our time: was there Soviet-
bloc involvement in the attempt to
assassinate the Pope?

We should understand the Soviet
role in international terrorism without
exaggeration or distortion: the Soviet
Union officially denounces the use of ter-
rorism as an instrument of state policy.
Yet there is a wide gap between Soviet
words and Soviet actions. One does not
have to believe that the Soviets are pup-
peteers and the terrorists marionettes;
violent or fanatic individuals and groups
are indigenous to every society. But in
many countries, terrorism would long
since have passed away had it not been
for significant support from outside. The
international links among terrorist
groups are now clearly understood; and
the Soviet link, direct or indirect, is also

Department of State Bulletin

THE SECRETARY

acts early understood. The Soviets use ter-
>rist groups for their own purposes,

*\ id their goal is always the same— to
eaken liberal democracy and under-
line world stability.

Counterstrategy Against Terrorism

having identified the challenge, we must
ow consider the best strategy to
nunter it. We must keep in mind, as we
evise our strategy, that our ultimate
im is to preserve what the terrorists
jek to destroy: democracy, freedom,
nd the hope for a world at peace.

The battle against terrorism must
egin at home. Terrorism has no place
l our society, and we have taken
igorous steps to see that it is not im-
orted from abroad. We are now work-
ig with the Congress on law enforce-
lent legislation that would help us ob-
ain more information about terrorists
hrough the payment of rewards to in-
armants and would permit prosecution
f those who support states that use or
ponsor terrorism. Our FBI is improving
ur ability to detect and prevent ter-
orist acts within our own borders.

We must also ensure that our people
nd facilities in other countries are bet-
er protected against terrorist attacks.
iO we are strengthening security at our
Embassies around the world to prevent
recurrence of the Beirut and Kuwait
Embassy bombings.

While we take these measures to
irotect our own citizens, we know that
errorism is an international problem
hat requires the concerted efforts of all
•ree nations. Just as there is collabora-
ion among those who engage in ter-
orism, so there must be cooperation
imong those who are its actual and
>otential targets.

An essential component of our
trategy, therefore, has been greater
•ooperation among the democratic na-
ions and all others who share our hopes
'or the future. The world community has
ichieved some successes. But, too often,
countries are inhibited by fear of losing
commercial opportunities or fear of pro-
/oking the bully. The time has come for
;he nations that truly seek an end to ter-
•orism to join together, in whatever
:orums, to take the necessary steps. The
declaration on terrorism that was
agreed upon at the London economic
ummit 2 weeks ago was a welcome sign
that the industrial democracies share a
common view of the terrorist threat.
And let me say that I trust and I hope
that that statement and the specific
things referred to in it will be the tip

and only the visible part of the iceberg.
We must build on that foundation.

Greater international cooperation of-
fers many advantages. If we can collec-
tively improve our gathering and shar-
ing of intelligence, we can better detect
the movements of terrorists, anticipate
their actions, and bring them to justice.
We can also help provide training and
share knowledge of terrorist tactics. To
that end, the Reagan Administration has
acted promptly on the program that
Congress approved last year to train
foreign law enforcement officers in anti-
terrorist techniques. And the President
has sent Congress two bills to imple-
ment two international conventions to
which the United States is a signatory:
the International Convention Against
the Taking of Hostages and the Mon-
treal convention to protect against sabo-
tage of civilian aircraft.

We must also make a collective ef-
fort to address the special problem of
state-sponsored terrorism. States that
support terror offer safehavens, funds,
training, and logistical support. We must
do some hard thinking about how to
pressure members of the "League of
Terror" to cease their support. Such
pressure will have to be international,
for no one country can exert sufficient
influence alone. Economic sanctions and
other forms of pressure impose costs on
the nations that apply them, but some
sacrifices will be necessary if we are to
solve the problem. In the long run, I
believe, it will have been a small price to

pay.

We must also discourage nations
from paying blackmail to terrorist
organizations. Although we recognize
that some nations are particularly
vulnerable to the terrorist threat, we
must convince them that paying black-
mail is counterproductive and inimical to
the interests of all.

Finally, the nations of the free world
must stand together against terrorism
to demonstrate our enduring commit-
ment to our shared vision. The terrorists
may be looking for signs of weakness,
for evidence of disunity. We must show
them that we are unbending. Let the
terrorists despair of ever achieving their
goals.

Active Defense

All the measures I have described so
far, domestic and international, are im-
portant elements in a comprehensive
strategy. But are they enough? Is the
purely passive defense that these
measures entail sufficient to cope with

the problem? Can we as a country— can
the community of free nations— stand in
a solely defensive posture and absorb
the blows dealt by terrorists?

I think not. From a practical stand-
point, a purely passive defense does not
provide enough of a deterrent to ter-
rorism and the states that sponsor it. It
is time to think long, hard, and seriously
about more active means of defense —
about defense through appropriate pre-
ventive or preemptive actions against
terrorist groups before they strike.

We will need to strengthen our
capabilities in the area of intelligence
and quick reaction. Human intelligence
will be particularly important, since our
societies demand that we know with
reasonable clarity just what we are do-
ing. Experience has taught us over the
years that one of the best deterrents to
terrorism is the certainty that swift and
sure measures will be taken against
those who engage in it. As President
Reagan has stated:

We must make it clear to any country
that is tempted to use violence to undermine
democratic governments, destabilize our
friends, thwart efforts to promote democratic
governments, or disrupt our lives, that it has
nothing to gain, and much to lose.

Clearly there are complicated moral
issues here. But there should be no
doubt of the democracies' moral right,
indeed duty, to defend themselves.

And there should be no doubt of the
profound issue at stake. The democ-
racies seek a world order that is based
on justice. When innocents are victi-
mized and the guilty go unpunished, the
terrorists have succeeded in undermin-
ing the very foundation of civilized socie-
ty, for they have created a world where
there is no justice. This is a blow to our
most fundamental moral values and a
dark cloud over the future of humanity.
We can do better than this.

No matter what strategy we pursue,
the terrorist threat will not disappear
overnight. This is not the last conference
that will be held on this subject. We
must understand this and be prepared to
live with the fact that despite all our
best efforts the world is still a danger-
ous place. Further sacrifices, as in the
past, may be the price for preserving
our freedom.

It is essential, therefore, that we not
allow the actions of terrorists to affect
our policies or deflect us from our goals.
When terrorism succeeds in intimidating
governments into altering their foreign
policies, it only opens the door to more
terrorism. It shows that terrorism

August 1984

ARMS CONTROL

works; it emboldens those who resort to
it; and it encourages others to join their
ranks.

The Future

If we remain firm, we can look ahead to
a time when terrorism will cease to be a
major factor in world affairs. But we
must face the challenge with realism,
determination, and strength of will. Not
so long ago we faced a rash of political
kidnapings and embassy takeovers.
These problems seemed insurmountable.
Yet, through increased security and the
willingness of governments to resist ter-
rorist demands and to use force when
appropriate, such incidents have become
rare. In recent years, we have also seen
a decline in the number of airline hijack-
ings— once a problem that seemed to fill
our newspapers daily. Tougher security
measures and closer international
cooperation have clearly had their effect.

I have great faith that we do have
the will, and the capability, to act
decisively against this threat. It is really
up to us, the nations of the free world.
We must apply ourselves to the task of
ensuring our future and consigning ter-
rorism to its own dismal past.

'Press release 156 of June 26, 1984.

Negotiating With the Soviets

by Paul H. Nitze

Address before the Foreign Policy
Association in New York City on June 1,
198 i. Ambassador Nitze is head of the
U.S. delegation to the intermediate-range
nuclear forces (INF) negotiations.

In 1954, just after the summit meeting
between President Eisenhower,
Khrushchev, and Bulganin in Geneva,
Chip Bohlen, then our Ambassador to
the U.S.S.R. invited Phyllis and me and
our children to stay with them at the
U.S. Ambassador's residence in Moscow.
At that time the British Ambassador in
Moscow was Sir William Hayter. There
was a story about Hayter that, when
asked what it was like to negotiate with
the Russians, he said it was rather like
dealing with a defective vending
machine. You put a coin in and nothing
comes out. There may be some sense in
shaking it; you may get your coin back;
but there is no point of talking to it.

Soviet Tactics

Hayter's statement, like most witty
cracks, is a gross overstatement, but
there is a kernel of truth in it. Negotia-
tions with the Russians can be important
and sometimes, in the past, have achiev-
ed useful results. But progress is
generally possible only if there has been
a prior Soviet Defense Council, or full
Politburo, decision favoring a deal on
the specific subject matter. If there has
been such a prior high-level decision,
then it is up to the Soviet negotiators to
get the best possible deal for the
U.S.S.R., but they will negotiate serious-
ly with the objective of arriving at a
deal. If there has been no such prior
positive high-level decision, the United
States will find itself negotiating with
itself. It will offer one position which
will be firmly rejected, modify it in the
hope that the new position will be more
acceptable to the Soviet side, modify it
again and again until finally it either
comes down to a position so onesidedly
favorable to the Soviets that they can't
fail to accept it or the United States has
to draw back and wait until Soviet
higher authority comes to the conclusion
that other events in the world are evolv-
ing in such a way that it would, in fact,
be advantageous for them to make a
balanced deal on terms that take ac-
count of U.S. interests, not only their
own.

As I look back on my experience in
negotiating with representatives of the
Soviet Union, a number of instances
come to mind.

Lend-Lease. In 1943 President
Roosevelt merged the organization of
the Board of Economic Warfare, of
which I was a part, with the Lend-Lease
Administration in the Foreign Economic
Administration. The lend-lease people
had worked out a procedure under
which the Soviet lend-lease mission in
Washington would submit documenta-
tion indicating the specifications of the
various items they needed and the ports
to which they should be delivered by
what dates. The Soviet mission had
fallen behind in getting these documents
to us. Arutinian, head of their mission in
Washington, was called in to explain the
delay. When the point was made to him
that he was behind in giving us the
necessary documentation, he flew into a
rage. He cried out that he had come to
the meeting to talk about "your behind,"
not "my behind." Nevertheless, the prob-
lems were sorted out, and we did
manage to get to the Soviet Union the
additional necessary war material in
time to help them defeat Hitler's armies
in Russia. In that instance both sides
had a common interest in winning the
war.

In the summer of 1946, I was ap-
pointed to head a U.S. team to negotiate
with a Soviet team the implementation
of Article XII of the Lend-Lease Agree-
ment. That article called for the two
sides to sit down promptly after the
defeat of Germany to work out the op-
timum way of conducting trade between
two states organized on differerent
social principles. As it happened, Arutin-
ian was again head of the Soviet team.
It proved impossible to entice Arutinian
into any discussion of the problem; he
had received no green light to do so. I
tried a number of different approaches
but in response to each one Arutinian
would say, "Mr. Nitze, what is your
specific proposal?" I was not authorized
to make a specific proposal. I wanted to
enter into a discussion with Arutinian
and his team with a view to developing a
joint proposal for consideration by our
governments. This he would not do. Un-
doubtedly he had received no guidance
from Moscow that they wanted an
agreement on that subject at that time.

Department of State Bulletin

ARMS CONTROL

Forces in Germany. When the
Soviets lifted the 1949 blockade of
Berlin, they laid down as a precondition
that we agree to a prompt meeting of
the Foreign Ministers of the United
States, the U.S.S.R., the United
Kingdom, and France. They gave us lit-
tle indication as to what it was they
wished to discuss at that meeting.
George Kennan and I thought they must
have something highly important in
. :;t mind; we thought they might well pro-
pose the removal of both U.S. and
Soviet forces from Germany. We
developed a plan called Plan A to re-
spond to that contingency. Chip Bohlen
told us we were quite wrong, that there
was no possibility that the Soviet Union
would wish to remove its forces from
Germany. We developed another plan,
Plan B, to respond to that alternate con-
tingency. On the very first day of the
conference, General Chuikov, the Soviet
High Commissioner in Germany, asked
Bohlen to have lunch with him. Early in
the conversation Chuikov said that he
understood there were those who
thought both sides should remove their
forces from Germany. He said, "They
are mad. The Germans hate us. It would
be madness to remove our forces." It
soon became evident in the conference
that no progress was possible on the
unification of Germany or even of
Berlin. It was possible to work out clear-
ing arrangements with respect to trade
between the two parts of Germany and
Berlin and to make some headway on
the Austrian State Treaty, but nothing
more. They had insisted on the foreign
minister meeting as a way of saving face
when they had concluded it was wiser
for them to lift the Berlin blockade than
to continue with it.

Disarmament. Prior to 1961, almost
all thought about arms control was in
the context of an international,
worldwide disarmament solution. The
Baruch Plan would have created a world
entity with authority restricted to one
subject matter— full ownership and con-
trol over nuclear raw materials and the
plants that processed or used those
materials. The Soviets rejected that con-
cept. They later came up with an unen-
forceable and impractical plan for what
they called "total and complete disarma-
ment."

During 1959, 1960, and 1961, there
were a series of meetings on the subject
in what were called the eight-nation
disarmament negotiations. I was an ad-
viser to the U.S. delegation during a
portion of those talks. It soon became
quite evident that the Soviet position

August 1984

was wholly directed toward supporting
their propaganda effort depicting the
Soviet Union as the great proponent of
peace and that they had no intention of
arriving at any concrete agreement as a
result of the talks.

Early in the Kennedy Administra-
tion, it became clear that the pollution of
the atmosphere caused by atmospheric
tests of large weapons — particularly by
the mammoth, multimegatonnage
weapons tested by the Soviets — would,
if continued, cause dangerous worldwide
pollution of the atmosphere. Once we in
Washington had worked out the kind of
a limited test ban treaty we could live
with, there was no great difficulty in
working out an agreement with the
Soviet Union. As I remember, it took
Averell Harriman and Gladwyn Jebb no
more than 13 days in Moscow to do so.
In that instance there was a definite
common interest in arriving at an agree-
ment. This was also true of the Non-
proliferation Treaty which followed
thereafter.

The idea of U.S.-U.S.S.R. talks
directed toward the limitation of the
nuclear weapons of the two principal
nuclear powers, rather than toward a
worldwide international disarmament
agreement, arose later during the
Kennedy Administration, specifically in
1963. Secretary McNamara tried to per-

In the attempt to get a comprehensive
treaty on offensive forces to parallel the
ABM Treaty, we offered a series of ma-
jor concessions, but in the end they
brought us nothing. The result was the
ineffective short-term accord, the In-
terim Agreement.

During the SALT II negotiations,
there never was an indication that the
Politburo had come to the decision that
they wanted a mutually advantageous
agreement. This again resulted in the
United States making one not fully
reciprocated concession after another in
an attempt to move the negotiations for-
ward. The final signed but unratified
SALT II Treaty, in my view, was un-
satisfactory. It was a one-sided agree-
ment which, by its terms, would expire
in 1985, before it would have any
substantial effect on the programs of
either side. More importantly, it did not
constitute a good foundation for SALT
III. The invasion of Afghanistan nailed
down its nonratifiability.

INF Negotiations

Over the last 2V2 years, I have been in-
volved in the intermediate-range nuclear
forces (INF) negotiations. Those negotia-
tions have focused on the Soviet SS-20
missile force and NATO's counter-
deployments of Pershing II and ground-

. . . progress [in negotiations with the Russians] is general-
ly possible only if there has been a prior Soviet Defense
Council, or full Politburo, decision favoring a deal on the
specific subject matter.

suade Kosygin of the merits of such an
approach at Glassboro in 1967. It was
not until 1968, however, that the Soviets
came to the conclusion that such talks
might be useful. The talks finally began
in Helsinki in the fall of 1969. Semenov,
the head of the Soviet delegation, said
that it was not until the fall of 1970 that
he received word indicating that the
Politburo had decided in favor of
reaching an agreement. The Politburo
interest, however, was restricted to an
agreement limiting antiballistic missile
(ABM) systems, not to an agreement
limiting the offensive forces of the two
sides. After a further year of intense
negotiations, it proved possible to arrive
at the ABM Treaty. A comprehensive
treaty of indefinite duration on offensive
forces proved to be impossible to obtain.

launched cruise missiles (GLCMs). In
November 1982, before the negotiations
began, we stated the ongoing U.S. posi-
tion. That was that the United States
would entirely forego its planned deploy-
ment of 572 Pershing lis and GLCMs if
the Soviets would eliminate their
SS-20s. I continue to believe that objec-
tively this would have been the optimum
solution for both sides. It would have
eliminated the entire class of INF
missiles worldwide. It would have been
verifiable with high confidence.

The first rounds of the negotiations
in Geneva were largely exploratory. The
U.S. side set forth the considerations it
thought important to arriving at a
mutually acceptable agreement. In
February 1982, we tabled a draft treaty

ARMS CONTROL

text setting forth in detail the provisions
we thought desirable to implement that
approach. Subsequently the Soviet side
set forth their considerations and tabled
a draft treaty text which embodied their
approach. Toward the end of the first
two rounds, each side quite fully
understood the position of the other
side. The question was how could one

On the Soviet side all the basic
elements of the package were rejected,
as was the free, uninstructed mode of
negotiation which led to it. I was subse-
quently told by Ambassador Kvitsinskiy
that Moscow had pretty well completed
its policy review by the time he returned
to Moscow after our "walk in the
woods." Our formula was quite contrary

During the SALT II negotiations, there never was an in-
dication that the Politburo had come to the decision that
they wanted a mutually advantageous agreement

cut through the maze of disagreements
and arrive at a mutually acceptable com-
promise.

At that point Ambassador
Kvitsinskiy, the head of the Soviet
delegation, told me that a basic review
of Soviet policy toward the INF negotia-
tions was scheduled to take place that
summer in Moscow. He said he thought
it important to make as much progress
as we could prior to that review taking
place. Once it had taken place the Soviet
position would become set in concrete
and it would be much harder thereafter
to get it changed. It was with the pros-
pect in mind that he and I decided we
should attempt, with some urgency, to
work out a package of mutual conces-
sions which might cut through the
panoply of issues dividing the sides. The
result was the "walk in the woods" for-
mula, in which the United States would
have moved off of its proposal to
eliminate all longer-range INF missiles
and would have agreed to deploy only
cruise missiles, and, for their part, the
Soviets would have accepted some U.S.
deployments in Europe, agreed to
reduce their systems in Europe to an
equal level, and to freeze their systems
in Asia. This dropped their unjustified
demand for compensation for British
and French nuclear forces.

From the U.S. standpoint the "walk-
in-the-woods" formula was not wholly
satisfactory. The United States would
have preferred freedom to choose within
the agreed ceiling the number of Persh-
ing lis or cruise-missile launchers which
it wished to deploy. It also would have
preferred a lower ceiling on SS-20s in
the Far East than a freeze at the then
current number of 90. However,
Washington approved the basic ap-
proach and the method by which Kvit-
sinskiy and I had arrived at. the formula.

to the decisions they had reached. As
best as I can reconstruct it, they had
come to the following decisions.

• From the standpoint of the sum of
Soviet interests and objectives, it would
be better for there to be no agreement
and for U.S. deployments to go forward
as scheduled rather than for them to
agree to and thus sanction any U.S. INF
missile deployments whatsoever. The
reason for this was basically political.
For the U.S.S.R. to enter into an agree-
ment sanctioning even minimal U.S.
deployments would undercut their grow-
ing group of supporters in NATO
Europe, including the supporters of anti-
Americanism and the antinuclear and
peace movements. These were all groups
into the support of which they had made
a major investment.

• They judged it improbable that
the United States and NATO would
agree to forego deploying INF missiles
if the U.S.S.R. would not eliminate their
SS-20s and that the negotiations were,
therefore, headed for a stalemate.

• It was decided to initiate im-
mediately a propaganda campaign
designed to throw the onus for the
failure of the negotiations onto the
United States.

• They decided to convey to the
U.S. INF delegation a threat to pull out
of the Geneva negotiations if and when
the United States took practical steps to
deploy INF weapons.

• They authorized the Soviet
military to proceed with full prepara-
tions for counter-counterdeployments to
begin when U.S. counterdeployments
began.

• They decided that after the
United States had begun their
counterdeployment to the SS-20s and
the Soviets had begun their counter-
counterdeployments to the Pershing lis

and GLCMs, the U.S.S.R. would take
the position that in any follow-on
negotiation the proper trade would be
their counter-counterdeployments
against our counterdeployments. This
would leave their existing SS-20
deployments substantially untouched.

After they walked out of the INF
and START negotiations in November-
December 1983, they announced they
were undertaking another basic policy
review of these_issues. It appears that
that review has resulted largely in a con-
firmation and hardening of their earlier
1982 decisions.

Soviet Decisionmaking Process

A good deal of study had been given to
the question of how decisions are ar-
rived at in the Soviet Union. I think it is
pretty well agreed that nothing can be
done by the Soviet Government or by
any of the other organs of Soviet society
subject to party control which is in con-
flict with decisions of the Politburo. Fur-
thermore, it is generally agreed that the
basic issues concerning defense, national
security, and arms control are made in
the Defense Council, which is customari-
ly chaired by the General Secretary of
the Party and on which a certain
number of the other members of the
Politburo also sit. Kvitsinskiy told me
there is also a subordinate body, chaired
by Foreign Minister Gromyko, which
deals with the day-to-day operations con-
cerned with arms control. On that com-
mittee are members of the military
establishment; Zamyatin, who chairs the
Central Committee subcommittee deal-
ing with the media and propaganda; and
Zagladin, who chairs the Central Com-
mittee subcommittee dealing with rela-
tions with other communist parties and
with what they call "political action," as
well as representatives from the
Ministry of Foreign Affairs and the
KGB. Kvitsinskiy left me with the im-
pression that it was this group that for-
mulated his instructions and coordinated
them with the political action, propagan-
da, and other campaigns which were
related to the objectives which their
arms control positions and statements
were designed to support.

Future of INF Talks

What is the outlook for the immediate
future? The U.S. position is clear. We do
not think the INF talks, or START,
should have been broken off. The Soviet
spokesmen gave as the reason for their
walking out, the votes in the British
Parliament, the Italian Parliament, and

Department of State Bulletin

ARMS CONTROL

finally in the Bundestag reaffirming
their 1979 decision that in the absence
of an INF agreement, the United States
should deploy INF missiles on their ter-
ritory. The Soviets say they cannot
negotiate while we are deploying; we
must remove the missiles already
deployed before they will return to the
negotiating tables. This is a worthless
argument. We sat at the table in Geneva
and negotiated hard and constructively
for 2 years while they were adding to
their already large deployments of
SS-20s an additional SS-20 system per
week.

We are ready to return to the
negotiating table on 24-hours' notice.
Part of our INF delegation is in Geneva
at the present time. The rest of us are
prepared to return on a moment's
notice. It is the Soviet Union, not the
United States, which has blocked and
continues to block progress in the
negotiations. Soviet higher authority
does not wish at this time to resume
either the INF or the START negotia-
tions. Instead, they are concentrating
upon a political, psychological warfare
campaign backed by a continuing com-
prehensive military build-up. They hope
to expand and exploit fissures within the
North Atlantic alliance and over time, if
possible, to get the United States out of
Europe. The main target of their cam-
paign is the United States and, in par-
ticular, President Reagan.

Soviet Analysis of Policy

It is worth reviewing for a moment the
way in which communists think that
policy should be analyzed. They start
with the proposition that there are cer-
tain fundamental theses which
distinguish the communist approach to
the world from that of others, par-
ticularly from that of the capitalist
world. Among those theses is the
primacy of the class struggle and the
continuing fight against imperialism in
the formerly colonial world. These
theses they hold to be unchangeable.
They have a different view with
respect to strategy. They think that
strategy should, from time to time, be
changed to reflect changes in the cor-
relation of forces. In the correlation of
forces they include not only military
forces but economic, political, and
psychological ones as well. When the
correlation of forces is favorable to their
side their doctrine calls on them to ex-
ploit that favorable correlation by mov-
ing forward. When it is negative, the
doctrine calls upon them to hold or to
retreat while they attempt to reverse
the trends in the correlation of forces.

August 1984

With respect to tactics, they believe
there should be great flexibility. The
guiding thoughts should be deception
and surprise. They also hold that it is
important at all times to decide upon
what they call the "general line." By that
they mean that it is necessary at all
times to correctly identify that group
which constitutes the major potential
future threat to their ability to carry
their program forward. During the early
years after the October 1917 revolution,
the "general line" called for concen-
trating their attack on the social
democrats within the U.S.S.R., the
group having the greatest potential ap-
peal to workers, the class they claimed
to represent but were less close to than
the social democrats. Later, after their
victory in the civil war, the "general
line" called for concentrating their at-
tack on the social democrats in other
countries, particularly Germany. In 1946

U-2s over the U.S.S.R., but they could
not shoot them down. During that
period they showed no anger. The mo-
ment they were able to shoot down a
U-2, Khrushchev put on a tremendous
show of anger and beat his shoe upon
the podium at the UN meeting of that
year. I doubt that there is merit in the
common thesis that the Soviet leader-
ship is angry at the United States or at
President Reagan, I believe that propa-
gandists are telling the Politburo that,
at least for the time being, this is the
astute impression to create.

A major point that emerges from
what I have been saying is that there is,
indeed, a contrast between the way the
United States and other countries in the
West approach foreign policy issues and
the way in which they are approached
by the Soviet Union. We approach
foreign affairs from the standpoint of
being a uniquely important member, but

The Soviets say they cannot negotiate while we are deploy-
ing . . . [yet we] negotiated hard and constructively for 2
years while they were adding to their already large
deployments. . . .

Stalin made it clear that he saw the
United States as being the principal
potential opponent, even at a time when
President Truman and his advisers were
striving hard to preserve in peacetime
the wartime collaboration between the
United States and the U.S.S.R. Today
the general line focuses directly on the
United States, and particularly on Presi-
dent Reagan, as being at the heart of
the only potentially effective opposition
to their program.

A further Soviet communist precept
is never to let emotion interfere with
what they call "scientific realism." One
should never let anger influence one's
judgment, although it might be advisable
from time to time to show anger. For
some time before 1960 we were flying

still a member having rights no greater
than those of other members, in a
relatively loose coalition of independent
states. The government of each of the
NATO states, for instance, is responsible
to a parliament elected by the votes of a
free populace informed by a free press.
On the Soviet side the situation is quite
different. Those who equate what they
call the two superpowers and imply that
they somehow are equally responsible
for today's difficulties are far off the
mark. The United States, like every
democratic country, continuously makes
mistakes, but the processes of a
democratic government permit mistaken
trends to be reversed and to some ex-
tent corrected. The totalitarian states,
when they go wrong, can go very wrong
indeed. ■

ARMS CONTROL

Nuclear Arms Control and
the NATO Alliance

by Edward L. Rowny

Address before the Royal United
Services Institute, in London on June 21,
198U. Ambassador Rowny is chief
negotiator for the U.S. delegation to the
strategic arms reductions talks
(START).

More than 6 months have passed since
the Soviets walked out of the INF
[intermediate-range nuclear forces] talks
in Geneva and refused to set a resump-
tion date for START, the strategic arms
reduction talks. These Soviet actions are
as regrettable as they are unnecessary.
They do, however, give us the oppor-
tunity to reflect upon the events of the
past several years. Accordingly, let me
review developments to date in START,
discuss the impact which recent events
have had on the NATO alliance, and,
finally, give you my thoughts on where
we should go from here.

Let me begin with a preview of
these issues. The major thought I would
like to leave with you is that throughout
START the United States has nego-
tiated seriously and flexibly. The Reagan
Administration remains committed to
the notion that the best way to increase
strategic stability is through substantial
reductions in nuclear arms. Next, we
made a number of modifications to the
original U.S. position in an effort to take
account of reasonable Soviet concerns.
Despite these efforts, a wide gulf con-
tinues to separate the U.S. and Soviet
positions in START. Nevertheless, more
progress was achieved in the course of
the talks than is generally recognized.
When the Soviets return to the
negotiating table, it should be possible to
build on that progress. I am convinced
that their own self-interest will eventual-
ly impel the Soviets to return to the
table. When they do, the best way to
build on the progress already made is
through the concept of trade-offs be-
tween areas of U.S. and Soviet advan-
tage, which President Reagan enun-
ciated as his plan for achieving an agree-
ment in the interest of both nations.

In walking out of the negotiations on
intermediate-range forces, the Soviets
are clearly testing Western resolve. The
Western democracies have met that
test. The best way to encourage the
Soviets to return to the table is to con-
tinue current programs designed to en-

sure our common defense, while
simultaneously reiterating our readiness
to resume negotiations toward balanced
and verifiable agreements. One-sided
cuts in our defense programs or failure
to uphold alliance commitments would
only reward the Soviets for their intran-
sigence and make a return to the
negotiating table less likely.

Achieving a high degree of Western
unity, however, has not been without its
price. In recent months, voices have
been heard on both sides of the Atlantic
which challenge some of the fundamen-
tals of NATO defense policy. Most
Americans and Europeans recognize
that the deployment of U.S. inter-
mediate-range missiles in Europe and
the modernization of U.S. strategic de-
terrent forces constitutes a necessary
and measured response to the massive
and continuing buildup of Soviet forces
threatening Western Europe and the
United States. At the same time, an
understandable concern about the conse-
quences of a strategy which relies for its
ultimate sanction on the possible use of
nuclear weapons has led many to ask if
there is not some better alternative.

We cannot ignore these questions. It
is patently obvious that we cannot
"disinvent" nuclear weapons. For the
foreseeable future, they will remain a
crucial element of the deterrent forces
necessary to preserve our liberties. We
need, however, to look for ways to
assure deterrence through reduced
reliance on weapons of mass destruction.
We must reduce the risk that nuclear
war would occur for, as President
Reagan has said, "A nuclear war can
never be won and must never be
fought." Strategic arms control
agreements which are soundly conceived
and firmly supported by our democratic
societies can improve the stability of the
nuclear balance between the super-
powers. Stability can also be enhanced
by upgrading NATO's conventional
forces in Europe. Raising the nuclear
threshold in Europe, in concert with in-
creased strategic nuclear stability,
reduces Soviet incentives to stimulate or
exploit crises and, therefore, reduces the
risk of nuclear war.

Developments in START

Let me briefly discuss the developments
to date in START. On May 9, 1982,
President Reagan outlined the basic
elements of the U.S. START proposal in
a speech at Eureka College. The Presi-
dent sought to break the mold of past
negotiations which concentrated on
limiting strategic offensive arms at high
levels. He sought to improve strategic
stability through substantial reductions
in the more destabilizing strategic offen-
sive arms. Specifically, he proposed to
reduce the number of ballistic missile
warheads on each side to 5,000, approx-
imately a one-third reduction from ex-
isting U.S. and Soviet levels. He also
proposed to reduce deployed ballistic
missiles to no more than 850. This
amounted to a 50% reduction from the
prevailing U.S. level of such missiles, a
level that was already considerably
lower than the Soviet level.

To achieve the basic objective of in-
creased stability, President Reagan
sought to focus reductions on the most
threatening strategic weapons — ballistic
missiles and, particularly, land-based in-
tercontinental ballistic missiles (ICBMs).
These are the most dangerous systems
because large numbers of powerful and
highly accurate warheads can be de-
ployed on them and because their fixed
basing mode makes them vulnerable to
attack. Our proposals also asked each
nation to reduce its heavy bombers to
lower equal levels.

The Soviets, for their part, proposed
to limit the numbers of ballistic missiles
and heavy bombers to a combined total
of 1,800. It was encouraging that the
Soviets joined us in departing from
SALT II [strategic arms limitation talks]
by proposing to limit not only launchers
but their weapons. In most other
respects, however, the Soviet proposal
closely paralleled the SALT II Treaty.

Nevertheless, by the spring of 1983,
it was clear that the U.S. and the Soviet
positions were still far apart. After an
exhaustive reevaluation, President
Reagan decided to make a number of
changes in the U.S. position. These
modifications were undertaken to meet
the major concerns the Soviets had ex-
pressed with our original proposal.

• We offered to raise the proposed
limit of 850 deployed ballistic missiles.

• We offered to drop the constraints
we had proposed on the number of
heavy and medium-sized ICBMs. We
also said we would no longer insist on
strict equality in U.S. and Soviet throw-
weight, provided the agreement substan-

Department of State Bulletin

ARMS CONTROL

tially reduced the current 3-to-l Soviet
advantage in this area.

• We offered to limit air-launched
cruise missiles (ALCMs) from the outset
of an agreement and proposed limita-
tions on numbers of heavy bombers and
ALCMs to levels well below those of
SALT II.

• In making these modifications, we
reaffirmed the importance of reductions
to 5,000 ballistic missile warheads.

On July 7, 1983, the United States
tabled a draft START treaty which
reflected these changes. In response, the
Soviets modified some of the more ex-
treme elements of their initial position.
They stated their willingness to limit
ALCMs numerically instead of banning
them and revised their one-sided pro-
posals on U.S. sea-based systems, which
would have banned the U.S. D-5
missiles and limited us to 4-6 Trident
submarines.

As a result of these developments,
when the fourth round of START ended
last summer, we left Geneva with the
expectation that we might be on the
verge of a breakthrough. Both sides ap-
peared to have begun the natural proc-
ess of modifying their original ingoing
positions in order to come closer to a
mutually acceptable accord.

Prospects for progress in START
were further enhanced in October 1983
when President Reagan decided to incor-
porate the mutual guaranteed build-
down into the U.S. START approach.
Build-down, which is important not only
in its own right but because it also has
wide bipartisan backing in the U.S. Con-
gress, is intended to encourage the
modernization of strategic forces in a
manner which leads toward stability.
President Reagan also took the highly
significant step of proposing that the
United States and the Soviet Union ex-
plore the concept of trade-offs between
areas of U.S. and Soviet advantage.

Unfortunately, when round five of
START resumed in October 1983, the
Soviets reacted negatively to the new
U.S. proposals. They dismissed build-
down and refused seriously to consider
trade-offs. It was evident from the
beginning of the round that the Soviets
were concentrating their efforts on
preventing U.S. deployments of missiles
in Europe. Reflecting their displeasure
that NATO had proceeded with INF
deployments, the Soviets walked out of
the INF talks and refused to agree to
our proposal to resume START negotia-
tions in February 1984.

As I mentioned earlier, considerable
progress was made during the first year

of the START negotiations, even though
it was obviously less than we would have
liked. For their part, the Soviets pro-
posed lower limits on the numbers of
missiles and bombers than they were
willing to consider in SALT and
acknowledged that, in any future agree-
ment, it is not sufficient to limit only
ballistic missile launchers. Some modest
progress was also made on verification;
the Soviets indicated a willingness to
consider cooperative measures to supple-
ment national technical means of
verification.

Nevertheless, a wide gulf still
separates the United States and the
Soviet Union in several fundamental
areas. The first major area of disagree-
ment concerns the level of reductions.
The United States has proposed the
most substantial reductions since the
beginning of U.S. -Soviet strategic arms
negotiations. Even though the Soviets
have proposed 25% reductions in the
number of delivery vehicles, under their
proposal the Soviets could actually
deploy about 45% more missile
warheads than they now have. Their
proposal thus gives the appearance, but
not the reality, of reducing offensive
arms.

The second major area of disagree-
ment concerns the treatment of heavy
bombers and the nuclear weapons they
carry. The United States proposed that
heavy bombers and ALCMs, while
limited to new lower levels, be treated

slower flying cruise missile. This pro-
posal is unacceptable because it fails to
distinguish between ballistic missiles —
whose large size, multiple warheads,
great accuracy, and short time of flight
give them the capability to be used in a
first strike — and cruise missiles — whose
slow speed of flight makes them clearly
retaliatory weapons.

Moreover, the Soviet proposal com-
pletely ignores the fact that the
retaliatory U.S. bomber force must be
capable of penetrating massive Soviet
air defenses which are unconstrained by
any agreement. It is clear that the
Soviets seek, through their proposal, a
large superiority in the number of
ballistic missile warheads.

We recognize that the kind of
changes we seek in Soviet and U.S.
strategic forces cannot be accomplished
quickly. Nor do we seek mirror image
force structures with the U.S.S.R. We
do, however, insist that any agreement
substantially reduce the number of
ballistic missile warheads and redress a
serious disparity in missile throw-
weight.

Fundamentally, the disagreement
over these issues revolves around the
question of whether a future agreement
will allow the Soviets to maintain their
3 to 1 advantage in ballistic missile
capability of strategic weapons. The best
measurement of such capability is throw-
weight, which constitutes the total
weight of warheads a missile is capable

Raising the nuclear threshold in Europe, in
concert with increased strategic nuclear stability,
reduces Soviet incentives to stimulate or exploit
crises and, therefore, reduces the risk of nuclear
war.

separately and not lumped together in a
combined aggregate limit of all weapons.
We made this proposal because heavy
bombers and their weapons are less
destabilizing than ballistic missiles. The
Soviets, however, have proposed a com-
bined ceiling on ballistic missile
warheads and all bomber weapons, in-
cluding ALCMs, shorter range air-
launched missiles, and bombs. In effect,
the Soviet proposal would equate the
large, highly accurate, and fast-flying
warheads carried on their SS-18 ICBM
with the much smaller warheads on a

of delivering to a target together with
its associated targeting devices. Past
agreements allowed the Soviets a
superiority in ballistic missile throw-
weight on grounds that their technology
lagged behind ours. Whatever the merits
of that argument then, it has no validity
now, since the Soviets have caught up
and even surpassed us in many areas of
missile technology. The Soviet advan-
tage in throw-weight has allowed them
to deploy over 6,000 large and highly ac-
curate warheads on their ICBMs. This
gives the Soviets a massive and highly

August 1984

ARMS CONTROL

destabilizing advantage in their ability to
attack "hardened targets" quickly. Such
hardened targets include missile silos,
command posts and the like. This means
that the Soviet Union has the only gen-
uine first-strike force in the world today,
a situation which will not change when
we deploy the MX, since the number we
plan to deploy would be objectively in-
sufficient for a first strike on the Soviet
Union. The United States, of course, has
never had and never will have any inten-
tion of using its strategic nuclear
weapons in a first strike. Consequently,
we must effectively refuse Soviet claims
that the MX will even give us the poten-
tial of doing so.

The INF Connection

Another major area of disagreement
between the United States and the
U.S.S.R. concerns the relationship be-
tween limits on strategic and intermedi-
ate-range systems. The Soviets attempt-
ed to link the START and INF negotia-
tions by conditioning the reductions they
proposed in START to no deployments
of Pershing II intermediate-range
ballistic missiles and ground-launched
cruise missiles (GLCMs). The Soviets
claimed that U.S. systems deployed in
Europe— which they call "forward-based
systems" — have strategic significance
because they can strike the U.S.S.R. We
pointed out that these U.S. systems did
not meet the previously agreed criteria
for intercontinental weapons. In SALT
II, an ICBM, for example, was defined
as a land-based ballistic missile of over
5,500 kilometer range. Moreover, the
United States and the Soviet Union
were negotiating on Pershing lis and
GLCMs— along with equivalent Soviet
missiles— in the INF talks. Absent an
INF agreement, however, NATO was
determined to deploy U.S. missiles to
counter the threat presented by the
much larger numbers of Soviet
intermediate-range nuclear missiles, a
threat which continues to grow as the
Soviets deploy even more SS-20s.

At the heart of this Soviet position
is a concept they call "equality and equal
security." At first glance, this seems to
be an unexceptional, if vague, formula.
However, as the Soviets envision it,
"equality and equal security" appears to
be nothing less than an insistence of a
Soviet "right" to possess nuclear forces
equal to those of all other nuclear
powers combined. In other words, it is a
prescription for Soviet global hegemony.

I do not want to get into a detailed
discussion of the INF negotiations. Let

me simply point out that in INF, as in
START, the United States negotiated
seriously and flexibly, making every ef-
fort to take account of legitimate Soviet
concerns. Unfortunately, all our efforts
foundered on the inflexible Soviet in-
sistence on retaining a monopoly of
longer range INF missiles. In essence,
the Soviet position in INF was aimed at
undermining NATO's ability to defend
itself.

Faced with Soviet unwillingness to
consider a balanced INF agreement,
NATO had no choice but to proceed with
deploying Pershing lis and GLCMs. We
stressed, however, our willingness to
continue the negotiations even after
deployments began and to remove these
missiles if a balanced agreement could
be achieved. We also pointed out that,
since the initiation of the INF negotia-
tions, the U.S.S.R. had deployed about
100 SS-20s— with some 300 warheads—
in addition to the 270 SS-20s already in
place when the talks began.

Impact on the NATO Alliance

The Soviets are clearly testing Western
resolve. Their hope is that the absence
of negotiations will impel the West to
make one-sided concessions to draw the
Soviets back to the negotiating table. So
far, I am happy to state, this Soviet
gambit has failed.

Let me stress my strong support for
the NATO alliance. I have been involved
in NATO affairs for almost 30 years. As
special assistant in the mid-1950s to
Gen. Lemnitzer, who was then the
Chairman of the U.S. Joint Chiefs of
Staff, I witnessed the wrenching debate
the alliance went through in its initial ef-
forts to devise a common military
strategy. The alliance emerged from
that debate all the stronger. The nations
of the alliance share a common political,
economic, and cultural heritage which
links our destinies closely together. The
ability of free people in Western Europe
and the United States to question the
policies of their elected governments
constitutes the bedrock of our common
heritage and represents one of our
greatest assets. The alliance could not
have survived this long if it could not
change in response to changing cir-
cumstances. The democratic process
followed in NATO represents the best
way to allow new ideas to be developed,
debated, and, if found desirable, carried
out in practice.

If this process is to work, however,
it demands an honest examination of our
current circumstances, including a will-
ingness to face unpleasant facts. We

cannot allow our satisfaction with 35
years of joint effort in successfully
deterring aggression to blind us to the
new political and military realities
NATO faces.

First, the Soviet threat continues to
grow. In recent years the Soviets have
made major efforts to reduce the
qualitative edge in weaponry on which
NATO has traditionally relied to offset
massive Soviet quantitative advantages.
In addition, the growing global reach of
Soviet military power has given Moscow
the capability to threaten vital alliance
interests in areas outside Western
Europe, such as the Middle East and the
Persian Gulf.

Second, NATO's military strategy is
being questioned. For the past two
decades, NATO policy for deterring at-
tack on Western Europe has rested on
its strategy of flexible response. This
policy is now being challenged by some
who believe that the costs of using
nuclear weapons — if it would ever come
to that — would be out of all proportion
to any conceivable benefit.

The overwhelming majority of Euro-
peans and Americans support a strong
NATO. Some Europeans, however,
assert that within the alliance frame-
work, European interests would best be
served by steering a middle course be-
tween the the two superpowers. At the
same time, some Americans urge the
United States to place less emphasis on
its Atlantic ties and to direct more at-
tention elsewhere. The former position
hints of a return to pre-World War II
appeasement; the latter of pre-World
War II isolationism. Both are wrong.

The existence of differences between
the United States and its European
allies is neither new nor particularly sur-
prising. NATO is an alliance of
sovereign nations. It is not, after all, the
Warsaw Pact. Moreover, in the broad
sweep of historical perspective, the ex-
istence of an alliance of sovereign na-
tions for over 35 years may well be un-
precedented.

Within a number of European na-
tions, the events surrounding deploy-
ment of NATO INF missiles stimulated
a broader debate on questions of nuclear
strategy. In reality, the debate among
Europeans over the missiles highlights
the importance of this issue to the
defense of Europe. By enhancing the
credibility of nuclear deterrent, the INF
deployment is designed to protect the
values of liberty, democracy, and
humanity which all Europeans would
agree mark the difference between
Western Europe and its totalitarian

Department of State Bulletin

ARMS CONTROL

adversary to the East; values which
Western Europe has done so much to
create and to spread throughout the
world.

The political challenge facing the
alliance is compounded by changes in
European perception of the United
States, due in part to the fact that the
leaders who were present at the creation
of NATO are passing from the scene.
They personally experienced the libera-
tion of Europe at the end of the Second
World War and helped plan U.S.
assistance to Europe in the early
postwar years. The place of the older
generation in positions of influence in
Western Europe is being taken by what
is often called the "successor
generation." This later generation
entered into active political life during
the 1960s; their initial perceptions of the
United States were often formed during
the difficult years of Vietnam and
Watergate.

In the years ahead, we will need to
devote more energies to ensuring that
our common political heritage and
mutual goals are better understood and
more solidly supported. This will require
more effort on both sides of the Atlantic
to understanding the different perspec-
tives which Europeans and Americans
bring to the alliance. To take one exam-
ple drawn from my experience as
START negotiator, the alliance has
developed a pattern of close and regular
briefings and consultations, a process
that has been very effective in ensuring
that European concerns are factored
into our bilateral negotiations.

As we chart the course of the
alliance over the coming years, I believe
we must keep in mind several basic
propositions.

First, the democratic traditions and
national independence of the Western
community are worth defending. We can
take comfort in the fact that there is lit-
tle disagreement on this point.

Second, the defense of our liberties
will require sacrifices. These sacrifices
must be borne equally by all members of
the community. As President Reagan
said recently, the defense of Western
Europe is vital to U.S. security, and the
United States will continue to do its part
in our common defense. At the same
time, the United States cannot be ex-
pected to attach greater importance to
the security of Europe than Europeans
do themselves. The nations of Western
Europe can, and should, do more to de-
fend themselves.

Third, it is imperative for the
alliance to devote more attention to im-

proving its conventional defense capabili-
ty. The desirability of reducing our
reliance on nuclear weapons is one
lesson we can learn from the anti-
nuclear protestors who filled the streets
of Europe last autumn. But if NATO is
ever to reduce its dependence on nuclear
weapons, it must have a better capabili-
ty to deter a Soviet attack on Western
Europe through conventional means.

these areas as rapidly as possible. At the
same time, we must avoid becoming the
captive of past ways of thinking. Thus,
developing the ability to successfully at-
tack communications and logistics
facilities deep in the enemy's rear would
not, as is sometimes charged, represent
a change in the defensive orientation of
NATO. Rather, it would constitute a
recognition that successful defense

The United States, of course, has never had
and never will have any intention of using its
strategic nuclear weapons in a first strike.

If we fail to improve the serious im-
balance between NATO's conventional
defensive capability and the conventional
capability of the Soviet Union and the
Warsaw Pact, the Soviet Union may be
tempted to commit aggression with its
conventional forces or to increase its ef-
forts to intimidate the nations of
Western Europe. Thus, upgrading
NATO's conventional forces is not only
urgent, but it is compatible with our
arms control proposals.

Fortunately, we are now presented
with a window of opportunity for en-
hancing the alliance's conventional
capability by the introduction of new
technology. These improvements could
enhance the alliance's ability to deter
Soviet conventional attack and, by rais-
ing the nuclear threshold, would reduce
the possibility of a devastating nuclear
war.

Without going into detail, let me
refer you to the recent "European
Security Study" report on strengthening
conventional deterrence in Europe. This
report highlighted five critical areas for
improving defense and deterrence by
NATO. These areas are:

• Countering an initial Warsaw Pact
attack;

• Eroding Soviet air power;

• Attacking Warsaw Pact follow-on
forces;

• Disrupting Warsaw Pact com-
mand and control; and

• Improving NATO command and
control.

We should welcome, therefore, the
decision at the last meeting of NATO
defense ministers to consider ways in
which emerging technology could be ap-
plied. I urge the alliance to proceed in

would be enhanced by an ability to
disrupt the second echelon of the enemy
offensive before it reaches the battle-
front. We should avoid adopting a
Maginot Line philosophy; that
philosophy did not work in the 1940s,
and it could not work in the 1980s or
1990s either. In any case, emerging
technologies can be applied to the entire
range of military tasks to counter the
Soviet threat.

Increased use of advanced tech-
nology would allow the NATO alliance to
exploit one of our greatest advantages
over the Soviet bloc. In exploiting this
advantage, however, we must be careful
to avoid excessive reliance on "gadgets"
and trap ourselves into the mistaken
belief that these new weapons could
allow us to defend with fewer soldiers.
As an infantry officer with service in
three wars, I am convinced that nothing
will ever eliminate the need for sizable
numbers of soldiers on the ground, with
their unique capability to seize and hold
terrain. However, if our soldiers are
given proper recognition of their import-
ance, their effectiveness can be im-
proved with modern technology. They
can be given more hope of successfully
defending against an attack. In short,
our soldiers in NATO are outnumbered
and must be assured that they can make
up for their smaller numbers with the
better weapons which advanced
technology of the West can provide.

In this connection, it is important
that we give more than lip service to en-
suring that all members of the alliance
share in the arms procurement process
for such advanced technology weapons.
Too often our plans for technological im-
provements have foundered over our in-
ability to resolve this thorny problem.

August 1984

ARMS CONTROL

Our current opportunity for improving
NATO's conventional capabilities and
thereby reducing the risk of nuclear war
should not be missed because of our in-
ability to cope with the problem of pro-
curement sharing.

In strengthening NATO's conven-
tional capability we must recognize that
as long as nuclear weapons exist, they
will be a factor in the defense of the
alliance. This means that the United
States will, for the foreseeable future,
have an important role to play in the
defense of Western Europe.

Only the United States has the
capability to maintain sufficient nuclear
forces to deter the Soviets across the en-
tire range of theater and strategic
threats. The fact that U.S. strategic
forces will remain NATO's ultimate
deterrent means that an American of-
ficer should remain at the head of
NATO's military command. No doubt,
there are many ways in which NATO's
political and military structure can be
improved to increase European par-
ticipation. However, appointing a Euro-
pean to the post of SACEUR [Supreme
Allied Commander Europe] is not one of
the ways in which NATO's structure
should be changed. It would be a grave
mistake to do so.

Lessons Learned From Negotiating
With the Soviets

Turning from START and alliance
issues, let me discuss some of the
lessons I have learned from 10 years of
negotiating strategic arms control with
the Soviets. The first lesson is that the
wide differences in the historical and
cultural experiences of the United States
and the Soviet Union have a direct im-
pact on our respective approaches to
negotiations. Americans tend to be
idealistic, activist, and pragmatic in our
approach to problemsolving. We are
often impatient. If one approach does
not work, we try another.

Conditioned by their Russian heri-
tage, however, the Soviets take a longer
view. Although they can be flexible on
tactics, their long-term objectives seldom
vary. Above all, they are remarkably
patient.

The Russian language has no native
root for the word "compromise"; the
word has been derived from other
languages. To Soviet negotiators, com-
promise carries a distinctly pejorative
connotation, one more associated with
"weakness" or "capitulation" than with
the Western connotation of "sensible" or
"reasonable."

These differences in Soviet and
American negotiating style have both
positive and negative features. On the
positive side, the American orientation
toward problemsolving means that most
of the breakthroughs in arms control
negotiations have come about as a result
of U.S. initiatives. On the other hand,
our impatience has, on repeated occa-
sions, allowed the Soviets to outlast us.
A common Soviet tactic is to react, not
initiate. As long as the United States
keeps coming up with new proposals,
the Soviets sit back patiently until one
appears that they like.

It is particularly important that we
remember this Soviet tactic now. In
both START and INF, the United States
has made a good faith effort to take ac-
count of Soviet concerns. We are
prepared to continue to negotiate on
that basis. But we cannot make uni-
lateral concessions designed solely to
lure the Soviets back to the negotiating
table.

The second lesson is that even
though our two nations differ in
ideology, in historical experience, in
moral values, and in negotiating style,
we share one important common objec-
tive: a mutual desire to avoid nuclear
war. We must, therefore, continue to
negotiate with one another toward this
common objective.

As long as the Soviet Union remains
determined to expand its power and in-
fluence at the expense of legitimate
Western interests, the United States
and the Soviet Union will be rivals.
Arms control will not end that rivalry
which stems from the very nature of the
Soviet system. Arms control can, how-
ever, make the rivalry less dangerous. It
can add a measure of predictability to
the U.S. -Soviet relationship and place
some bounds on the competition.

A corollary to this second lesson is
that arms control is an important ele-
ment of our foreign policy and thus can-
not be divorced from the general climate
of U.S. -Soviet relations. Arms control
cannot by itself turn around a climate of
relations which Soviet actions have
soured. Nor, in the final analysis, would
it be realistic to expect the United
States and the Soviet Union to be able
to conclude far-reaching arms control
agreements at a time when relations are
at a low point. At such times, our first
priority must be to repair the basic
fabric of the relationship, to set the
stage for further arms control.

A third lesson is that we must be
realistic about the military benefits of
strategic arms control. Balanced arms

control agreements can improve stabili-
ty. But arms control agreements can
never, by themselves, substitute for the
determination of free people to maintain
the ability to deter Soviet aggression.
Indeed, such determination is a vital
prerequisite for any effective arms con-
trol agreement with the U.S.S.R. This is
a central paradox of arms control
negotiations, a paradox not well under-
stood by many Western critics. If we are
to negotiate arms control agreements
with the U.S.S.R., we must not appear
to be overly eager for an arms control
agreement. We must be able to convince
the Soviets not only that they will be
better off with an agreement, but that
they will be worse off without one. Put
another way, if we want to be in a posi-
tion to negotiate arms reductions with
the Soviets, we first have to convince
them that we have the will to match
them in the absence of an agreement.

At the same time, we have to recog-
nize that arms control agreements must
be based on existing military realities.
One of these realities is the difference in
the structure of U.S. and Soviet strate-
gic forces. An arms control agreement
can be useful in closing off dangerous
areas of competition and in encouraging
trends which lead toward greater stabili-
ty of the U.S. -Soviet military relation-
ship. However, we should not delude
ourselves into thinking that an arms
control agreement will free us from the
responsibility of taking care of our own
security. Moreover, arms control
agreements by themselves will not
necessarily result in major savings in
defense spending. Both the United
States and the Soviet Union maintain
large, complex, and expensive strategic
forces. They will undoubtedly continue
to do so after any conceivable strategic
arms control agreement.

An arms control agreement should
improve the stability of the strategic
balance in two important ways.

First, it should inhibit the deploy-
ment of large numbers of strategic of-
fensive weapons capable of being used in
a first strike.

Second, it should encourage the
deployment of survivable and retaliatory
systems.

Achieving an agreement which im-
proves the stability of the strategic
balance calls for the necessity of recog-
nizing that not all reductions have an
equally beneficial impact on strategic
stability. The SALT II Treaty, painfully
negotiated over a period of 7 years,
would have required a reduction of

Department of State Bulletin

is B

ARMS CONTROL

fflce

■;)

.bout 300 Soviet strategic missiles or
lombers. One of its most important
hortcomings, however, was that it per-
nitted a massive increase in the
lumbers of ballistic missile warheads,
i'he Soviets were able to use their
hrow-weight advantage to deploy such
nassive numbers of large, highly ac-
urate nuclear warheads that they are in
i position to threaten the destruction of
are t large part of the U.S. ICBM force
vith only a small portion of their own
trategic forces.

It is evident, therefore, that only an
igreement which limits in a verifiable
manner both the number and the de-
structive power of ballistic missile
varheads can genuinely improve the
tability of the strategic balance.

Stability, survivability, and moder-
nization are interrelated, particularly in
view of the different way the United
States and the U.S.S.R. have chosen to
structure their strategic forces.
Historically, the Soviet Union has
deployed the bulk of its strategic forces
in land-based ICBMs. Nevertheless, the
Soviets recognize that their ICBMs will
become more vulnerable as the United
States begins to redress its current
asymmetries by deploying modern, more
(capable systems. The Soviets, therefore,
are already planning to deploy a portion
of their ICBMs in a mobile basing mode.
The United States, even though it has a
smaller portion of its total forces in
land-based systems, also recognizes the
decreased vulnerability of moving to
mobile land-based systems.

Mobile ICBMs demonstrate what
may become an increasingly difficult
problem for arms control in the coming
years: their verifiability. Mobile ICBMs
must be effectively verified. Otherwise
they could be extremely destabilizing be-
cause the opposing side might have no
real idea of the magnitude of the threat
it faces.

Cruise missiles present a similar
dilemma. Because of their long flight
time, cruise missiles are inherently
retaliatory weapons. Yet cruise missiles,
because of their small size and because
they can be deployed in a variety of bas-
ing modes, are difficult to verify.

The United States has a number of
serious concerns about Soviet failure to
comply with previous arms control
agreements. We will continue to press
these concerns with the Soviet Union
through diplomatic channels and insist
upon explanations, clarifications, and
corrective actions. At the same time, the
United States is continuing to carry out
its own obligations and commitments
under relevant agreements.

August 1984

We should recognize, however, that
ensuring compliance with arms control
agreements remains a serious problem.
Better verification and compliance provi-
sions and better treaty drafting will
help, and we are working toward this in
ongoing negotiations. It is fundamental-
ly important, however, that the Soviets
take a constructive attitude toward com-
pliance.

Future arms control agreements
will, accordingly, require more effective
verification measures than in past agree-
ments. In particular, a START agree-
ment will require cooperative verifica-
tion measures, possibly including some
form of onsite inspection, to supplement
national technical means.

Conclusion

With the talks in limbo for over 6
months, the natural question is where do
we go from here? Discussion of this
question has to begin with a few basic
facts.

First, it was the Soviet Union and
not the United States which interrupted
the negotiations. The United States is
ready to resume the negotiations at any
time without preconditions. We have re-
peatedly made this point to the Soviets,
both in public and in private channels.

Second, the United States has good
positions on the table in START and
INF. We believe an agreement based on
our proposals will serve the interest of
both nations.

bomber capabilities in return for equiva-
lent Soviet limits on its advantage in
ballistic missile capabilities. We have a
number of concrete ideas in mind on
how the concept of trade-offs might be
applied in START, and we are ready to
explore them with the Soviets in some
detail once the Soviets decide to resume
the negotiations.

But it takes two to negotiate, and,
accordingly, the natural next question is
what do the Soviets intend to do? As a
longtime student of Soviet affairs, I
recognize the pitfalls in attempting to
predict Soviet actions.

One reason why the Soviets are not
negotiating is the uncertain situation in
the Soviet hierarchy. In the past year
and a half, the Soviets have experienced
two changes of leadership. In the not
too distant future, they may face yet
another leadership turnover.

Chernenko's accession to power rep-
resented a victory for the conservative
old guard, the small group of men who
have stood at the top of the Soviet
Government since the Brezhnev era.
They show little inclination to undertake
the innovative or imaginative measures
which would be required to resolve the
serious internal problems facing the
Soviet Union. In the economy, to take
one example, Chernenko appears to be
backpedaling from even the relatively
modest innovations which Andropov
sought to introduce. In the time-honored
style of Soviet bureaucrats, Chernenko
apparently seeks to resolve Soviet eco-

The Russian language has no native root for
the word "compromise"; . . . To Soviet negotiators,
compromise carries a distinctly pejorative conna-
tion, one more associated with "weakness" or
"capitulation" than with the Western connotation
of "sensible" or "reasonable. "

Third, any negotiation is a process
of give-and-take. As I noted earlier, we
have already modified our initial position
to take account of several of the Soviets'
major concerns. We have also told the
Soviets that, in an effort to reach a
mutually acceptable accord, we are
ready to explore trade-offs between
areas of U.S. and Soviet advantage.
Specifically, the United States is pre-
pared to limit its advantage in heavy

nomic problems by tinkering with the
administrative apparatus rather than by
undertaking the far-reaching structural
changes which most observers believe
are required.

In foreign policy, likewise, the
watchword of the Chernenko regime is
continuity. It would be wrong, however,
to conclude that this accent on continui-
ty will prevent the Soviets from carrying
out an effective foreign policy.

ARMS CONTROL

The Soviets recognize that they lost
the first round of the INF contest. How-
ever, they are far from ready to admit
that the game is over. Having failed to
block initial deployments, the Soviets
hope to force us to pay a high political
price for proceeding with further sched-
uled deployments.

Through their adamant stand
against any NATO INF deployments
and by appearing to make the with-
drawal of these missiles a precondition
for the resumption of negotiations, the
Soviets have, in effect, painted them-
selves into a corner. For the present,
the Soviets seem disinclined to take any
actions to get themselves out of this
situation. It would be a mistake for us to
make unilateral concessions simply to
get the talks resumed. The West should,
however, refrain from actions which
could make it more difficult for the
Soviets to extract themselves from their
corner. But as the President has said:
"The door is open and every once in a
while we're standing in the doorway to
see if anyone's coming up the steps."

The Soviets, for the time being, are
continuing to use their deployments as
well as ours as a basis for creating an
atmosphere of crisis around East-West
relations. They have blamed the United
States for the breakdown of the negotia-
tions and have claimed that NATO INF
deployments make war more likely. In
fact, the opposite is true. NATO INF
deployments, by increasing its ability to
deter Soviet attack, actually increase the
prospects for lasting peace.

In calling for a rollback in NATO
INF deployments, without any reduction
in the threat that Soviet SS-20 missiles
and other nuclear forces present to
Europe, the Soviets are, in effect, deny-
ing any legitimacy to the security con-
cerns of Western Europe. The Soviet ob-
jective is clear. They are attempting to
decouple the United States from the
defense of Europe and to pressure the
Western alliance in an effort to extract
one-sided concessions. At the same time,
the Soviets are using the unwarranted
argument that the NATO INF deploy-
ments are responsible for a change in
the strategic situation between the
United States and the U.S.S.R.

It is my belief that in these circum-
stances, NATO must do two things.
First, it must continue to exhibit firm-
ness in the face of Soviet pressure tac-
tics. Second, it must seize the opportuni-
ty that new weapons technology makes
possible to upgrade its conventional
military capability in Europe.

We in the United States continue to
modernize our strategic forces and will
continue to hold out the prospects for
negotiations.

I believe that eventually the Soviets
will recognize that it is in their interest
to return to the negotiating table. What
is necessary is a political decision by the
Soviets which recognizes that the time
for posturing is over and the time for
serious negotiations is long overdue.
When the Soviets make that decision,
they will find us ready. ■

Preserving Freedom and Security

by Kenneth W. Dam

Statement before the Senate Foreign
Relations Committee on June IS, 1984.
Mr. Dam is Deputy Secretary of State.1

No issue is of greater importance to the
Administration or to the American peo-
ple than war and peace. As President
Reagan has said, "We must both defend
freedom and preserve the peace. We
must stand true to our principles and
friends while preventing a holocaust."
There is no escaping this dual respon-
sibility. Indeed, the task of preserving
our freedom and security has never been
more important or more complex than it
is today.

A sound national security policy
rests on the conviction that, whatever

our differences, the United States and
the Soviet Union have a profound com-
mon interest in avoiding nuclear war
and its unimaginable consequences. A
responsible national security policy must
include both a firm resolve to maintain
deterrent forces and an active pursuit of
arms control to restrain competition.
That is our policy.

Arms control is not a panacea for
our problems around the world. It is one
facet of our relationship with the Soviet
Union, albeit a very important one.

It is useful to keep in mind what
nuclear arms control can and cannot do.
Arms control cannot:

• Eliminate the threat of nuclear
war. Nuclear weapons cannot be
disinvented;

• Save vast amounts of money.
Nuclear forces constitute about 15% of
the budget of the Defense Department;

• Substantially reduce casualties or
damage should a nuclear war occur. A
small number of weapons can do
catastrophic damage.

Arms control, however, can:

• Substantially reduce nuclear
forces.

• If approached properly (that is, if
the constraints encourage an evolution
toward smaller, more survivable, and
more stable forces on both sides), arms
control can enhance stability and reduce
the risk of war.

We must bear in mind that progress
in arms control requires good faith
bargaining on both sides and also
depends on many factors beyond the
substance of our proposals. For arms
control to succeed, we must work to
shape the conditions that make success
possible: we must maintain the balance
of power and ensure the strength of our
alliances even as we recognize the
legitimate security concerns of our
adversaries.

Modernization of our military forces
is an important — and essential— element
of our approach to preserving the
balance and creating an environment in
which arms control can be successful. As
you know, during the past decade or
more, Soviet military expenditures have,
in many vital categories, far outstripped
our own. The President's modernization
program is designed to restore the
balance, enhance deterrence, and in-
crease Soviet incentives to negotiate
equitable, verifiable arms control
agreements. Modernization is, thus, an
integral part of our national security
policy that includes both effective deter-
rence and effective arms control.

In all of the many arms control ef-
forts this Administration has under-
taken, we are guided by four objectives.

Reductions. We seek agreements
that actually constrain the military
capabilities of the parties through
substantial reductions in weapons and
forces, not merely freezing them at ex-
isting or higher levels.

Equality. The final result should be
equal or equivalent levels of forces on
both sides. An agreement that
legitimizes unequal forces creates in-
stability which could unravel the agree-
ment and may, over time, increase the
risk of conflict.

'Department of State Bulletin

ARMS CONTROL

vs<

Stability. An agreement must im-
rove the stability of deterrence in a
risis. If each side's forces are secure
nough to survive an all-out attack, the
ncentive to preempt in a crisis or con-
'rontation will be minimized. This is an
mportant message of the bipartisan
Scowcroft commission's report on the
future of our strategic forces.

Verifiability. Finally, arms control
agreements must be effectively
verifiable. In the past, agreements for
which compliance cannot be verified
have generated mistrust and suspicion
rather than reinforced the prospects
with greater stability. The President's
January report to Congress finding
Soviet violations or probable violations
of several arms control agreements
underscores the need for effective
verification.

Building on these four principles,
this Administration has undertaken an
unprecedented range of arms control
negotiations across the whole spectrum
of East- West security issues. As part of
our effort to create an environment con-
ducive to successful negotiations, the
Administration has adopted a policy of
not taking actions that would undercut
: existing strategic arms agreements, pro-
vided the Soviet Union exercises equal
restraint. This continues to be our
policy.

Let me turn now to several of the
more significant subjects.

Strategic Arms Reduction Talks

The major goal of our approach to
strategic arms control is to enhance
stability and reduce the risk of war
through significant reductions in U.S.
and Soviet ballistic missile forces, par-
ticularly ICBMs [intercontinental
ballistic missiles]. As you are well aware,
these systems can present special prob-
lems. Reduced reliance on ICBMs—
especially large MIRVed [multiple
independently-targetable reentry vehicle]
ICBMs— would directly diminish the in-
centive for one side to use its nuclear
weapons first in a crisis against
elements of the other side's strategic
deterrent.

Thus, the heart of our position in
START [strategic arms reduction talks]
is a substantial reduction in the number
of ballistic missile warheads. After close
consultation with Congress, we have
proposed to accomplish these reductions
by means of a "build-down," where each
side reduces more weapons than it
deploys until the agreed limit is reached.

August 1984

In addition, we have been sensitive
to Soviet concerns that our position re-
quires extensive restructuring of their
strategic force. Consequently, over the
past year we made several modifications
to our original proposal. We tabled a
draft treaty that collapsed the two
phases envisioned in our original pro-
posal into a single agreement, making
clear that all systems would be limited
from the outset. We also demonstrated
flexibility and solicited Soviet ideas on
how to reduce the current large dis-
parity in ballistic missile throw-weight.
Finally, the President has communicated
our willingness to negotiate trade-offs
between areas of comparative U.S. and
Soviet advantage.

Soviet responsiveness to our con-
cerns over the course of five rounds of
negotiation has been less than we would
have liked, but they have taken some
positive steps. While our positions re-
main far apart, the Soviets have in-
dicated their willingness to discuss
reductions in their nuclear delivery
vehicles and have offered some changes
in their own position. For the most part,
however, the Soviet proposals are
designed to allow them to retain their
advantage in ballistic missile destructive
power and even to increase the number
of their ballistic missile warheads.

We believe our proposal for trade-
offs could pave the way for future prog-
ress. But, unfortunately, the Soviets tied
progress in START to preventing INF
[intermediate-range nuclear forces]
deployments in Europe. Last December,
they refused to agree to a resumption
date for START, apparently due to
frustration over their failure to prevent
the deployment of Pershing lis and
GLCMs [ground-launched cruise
missiles]. What is needed now is for the
Soviets to return to the negotiating
table. It is in their interest as well as
ours.

Intermediate-Range Nuclear Forces

Our proposals in negotiations on
intermediate-range nuclear forces fur-
ther underscore our commitment to the
goal of reductions in nuclear weapons.
The President's objective in these
negotiations, familiar to all, was even
more far reaching than in START — to
eliminate an entire category of missiles
on a global basis. When the Soviet
Union found this approach too far
reaching, we proposed an interim solu-
tion whereby we would significantly
reduce our planned deployments if the
Soviet Union would reduce its SS-4s, 5s,
and 20s to an equal number of

warheads. However, the Soviets rejected
this interim approach as well, since any
outcome which would allow the deploy-
ment of a single U.S. intermediate-range
missile is inconsistent with their policy
of maintaining a monopoly of such
missiles in Europe and Asia. We again
modified our position several times dur-
ing 1983 to take account of express
Soviet concerns regarding Pershing II,
aircraft limitations, and global con-
straints.

Nevertheless, the Soviets remained
intransigent on preserving their
monopoly of these missiles. Every Soviet
proposal permits none for the United
States. Their final idea, proffered im-
mediately prior to breaking off negotia-
tions, would have had eaeh side reduce
actual or planned deployments by 572
warheads — thus leaving them 700
warheads and the United States zero.

The Soviet Union attributed its
walkout to the initiation of the U.S.
deployment of INF missiles in Europe.
There is no justification for the Soviet
walkout. We negotiated in good faith
despite the fact that during the 2 years
of negotiation the Soviet Union deployed
over 100 new SS-20 missiles with more
than 300 warheads. Moreover, many
U.S. nuclear weapons have been and are
in the process of being withdrawn from
Europe under decisions taken by NATO
ministers in 1979 and 1983. By the time
our INF deployments are complete,
more than five warheads will have been
withdrawn for every new one deployed.

We are ready to resume negotia-
tions—in both START and INF— at any
time and place, without preconditions.
Our proposals are fair and workable. All
the elements for an agreement are on
the table. We hope the Soviet Union will
come to recognize that its policy of non-
negotiation and countermeasures is not
intimidating Western publics.

Nuclear Testing

On nuclear testing limitations, the Ad-
ministration determined that the 1974
Threshold Test Ban Treaty and its com-
panion, the 1976 Peaceful Nuclear Ex-
plosions Treaty, are not effectively
verifiable in their present form. On a
number of occasions last year, we ap-
proached the Soviets and invited them
to discuss with us verification im-
provements to these accords. Each time,
the U.S.S.R. rebuffed our request for
talks. We remain determined to make
progress in this area, but our efforts
have been made much more difficult by
the Soviet attitude. Possible next steps
on this issue are under active review.

ARMS CONTROL

Space Arms Control

The United States has long been com-
mitted to the exploration and use of
space for peaceful purposes. We played
a leading role in formulating the con-
siderable body of international law
regarding space. The Limited Test Ban
Treaty of 1963, the Outer Space Treaty
of 1967, and the Agreement on the
Rescue of Astronauts, the Return of
Astronauts and the Return of Objects
Launched Into Outer Space of 1968 are
notable examples. The Charter of the
United Nations also includes provisions
germane to outer space.

The United States does not seek an
arms race in space, nor do we
underestimate the current and potential
future threat of Soviet antisatellite
weapons. The Administration has been
seriously studying the question of
whether constraints on space weapons
or activities could be found that would
be equitable, verifiable, and compatible
with U.S. security. The President's
report on U.S. policy on controlling anti-
satellite weapons, sent to Congress in
April, provides the initial findings of this
study. We are continuing on an urgent
basis our studies to see whether accep-
table measures banning or limiting
specific weapons systems can be iden-
tified.

Mutual and Balanced Force
Reductions (MBFR)

In addition to our efforts to reduce
nuclear weapons, we and our allies have
continued discussions with the Warsaw
Pact nations on the mutual and balanced
reduction of conventional forces in cen-
tral Europe. The United States is play-
ing a constructive role, broadening the
scope of the East- West arms control
agenda and pursuing reductions in con-
ventional forces to lower, equal levels.
The major stumbling block for some
time has been the discrepancy between
the manpower figures provided by the
Warsaw Pact and our estimates of those
forces. We, with our NATO allies,
recently proposed a new initiative
designed to resolve this problem, which
we hope will lead to serious negotiations
on verifiable reductions to parity. The
initial Soviet response, however, is not
encouraging.

Chemical Weapons

Our major challenge in the area of
chemical weapons is to reestablish the
longstanding code of restraint against
the use of chemical weapons. The United

States seeks the total elimination of
chemical weapons. In April, Vice Presi-
dent Bush presented to the Conference
on Disarmament in Geneva a draft trea-
ty for a comprehensive ban on their
development, production, stockpiling,
transfer, and use. The draft treaty also
contains innovative verification provi-
sions that we hope the Soviet Union will
be willing to address. We firmly believe
that the chemical weapons problem
demands a radical solution, and we are
prepared to go forth with one.

Confidence-Building Measures

Complementing our proposals to reduce
nuclear and conventional forces, we are
proposing confidence-building measures
designed to reduce the risk of war as
the result of surprise attack, accident, or
miscalculation. Over the last year, we
and the Soviets have held a series of
constructive meetings on upgrading the
"hotline," the direct communications link
between Washington and Moscow.

In START and in INF, we have
made a number of proposals, such as for
prior notification of ballistic missile
launches and major military exercises
and expanded exchanges of military
force data.

In the Stockholm Conference on
Disarmament in Europe, the United
States, with its allies, is pursuing addi-
tional measures on notification and in-
spection of military exercises. The
Soviet Union has not accepted these pro-
posals, focusing instead on a declaration
of the non-use of force. As the President
said in Dublin:

If discussions on reaffirming the principle
not to use force, a principle in which we
believe so deeply, will bring the Soviet Union
to negotiate agreements which will give con-
crete, new meaning to that principle, we will
gladly enter into such discussions.

Lastly, both East and West are
already routinely exchanging notification
of exercises that might be otherwise
misinterpreted. We believe these prac-
tices should be broadened and made
mandatory.

Conclusion

Ultimate success in these arms control
efforts will depend on a number of fac-
tors: credible deterrent forces, a strong
alliance, and a willingness to work
together to conclude balanced and effec-
tive agreements which safeguard each
nation's interests. But these conditions
will, in turn, depend on the qualities that
we as a nation bring to the negotiating

table: patience, perseverance, and unity.
Just as cohesion among allies is crucial
to the West's position in such negotia-
tions as INF and MBFR, unity in this
country is critical to progress in all these
negotiations. If we appear divided, the
Soviets will conclude that they can ac-
complish at least some of their objec-
tives without negotiations, without com-
promise, and without constraints on
their forces. On the other hand, con-
structive bipartisan support of our arms
control proposals and strategic mod-
ernization programs will advance the
prospects for arms control.

President Reagan has often spoken
of his desire to build a constructive rela-
tionship with the Soviet Union. His ap-
proach is based on credible deterrence,
peaceful competition, and constructive
cooperation. Unfortunately, the Soviets
have not yet taken up this challenge.
The shrill tenor of recent Soviet
statements directed toward the United
States is disappointing. While we have
shown flexibility in both our INF and
START proposals and have made clear
we will meet the Soviets half way should
they return to Geneva, they still refuse
to reestablish the nuclear arms control
dialogue. Success in arms control will re-
quire substantial changes in the Soviet
approach.

We continue to express our will-
ingness to resume these negotiations
any time, without preconditions. We
have no intention of sacrificing our basic
objectives of reductions, equality, stabili-
ty, and verification. Yet we realize there
may be more than one way to achieve
these objectives, and the President has
made clear that there is flexibility in our
approach. We stand ready; we have
taken the first step. Now it is up to the
Soviets to respond.

'The complete transcript of the hearings
will be published by the committee and will
be available from the Superintendent of
Documents, U.S. Government Printing
Office, Washington, D.C. 20402. ■

Department of State Bulletin

ECONOMICS

Steel: Domestic Industry in
a Global Market

by W. Allen Wallis

Address before the Convention of the
Iron and Steel Society of the American
Institute of Metallurgical Engineers in
Chicago on April 2, 1984. Mr. Wallis is
Under Secretary for Economic Affairs.

I may say more about steel than about
foreign policy, but this group should not
object if I do that. My comments will be
based on some principles of a free-
enterprise, market economy. These prin-
ciples are accepted widely on faith but
often violated in practice. My remarks
will fall into three categories: history,
economics, and international politics.
First, I w-ill review briefly some
recent history of government-industry
relations, especially government interven-
tions in the affairs of the steel industries
here and abroad. Then I will explore
some major economic problems that have
arisen in the steel industry as a result of
government intervention. Finally, I will
look at some of the major international
political problems facing our domestic
steel industry, and the Reagan Ad-
ministration's responses.

The Dismal History of Government-
Steel Industry Relations

The recent history of the relations be-
tween our government and the steel in-
dustry is instructive; but, like lots of in-
struction, it is painful.

In 1952 the Federal Wage Stabiliza-
tion Board made recommendations for a
new contract between the major steel
companies and the United Steelworkers.
The companies refused to accept the
wage board's proposals, and the union
called a strike. President Truman issued
an executive order seizing the steel
plants, and the Secretary of Commerce
was made responsible for operating them.
Fortunately, the Supreme Court reversed
the President's action a month later.
Labor and management eventually
worked out an agreement.

In 1962, after a wage settlement domi-
nated by the government, Roger Blough,
the president of U.S. Steel, announced a
price increase. The announcement moved
President Kennedy to excoriate Blough
publicly, to initiate antitrust investiga-
tions against the steel companies, to
launch examinations of the personal tax
returns of steel executives, to have the

FBI rouse newspaper reporters out of
bed in the middle of the night for ques-
tioning, and generally to loose all of the
vast powers of the government for a pur-
pose which, as I said in a speech in
Pittsburgh shortly after the event, was
"... entirely outside the law. Since the
powers he used . . .," I said, "are per-
fectly legal, redress through the courts
[such as was obtained after President
Truman's action] is probably impossible
and certainly improbable." Needless to
say, the industry yielded to this authori-
tarian intimidation and coercion.

Thus began a pattern which has led to
wages and benefits for steel workers far
higher than in most other industries. In
addition to government pressures on
wages, or perhaps because of the results
of those pressures, there have been
significant restrictions on imports of steel
during 9 of the last 16 years. We have had
so-called "voluntary" export restraints by
our major steel suppliers; we have had
trigger-price mechanisms I and II; we
have had a surge-monitoring mechanism;
we have had a special arrangement with
the European Community. These devices,
conceived as temporary, did not solve the
industry's problems, well intentioned
though they were.

At this moment, we face two new ma-
jor initiatives for protection against steel
imports. In one, Bethlehem Steel and the
United Steelworkers have filed a petition
for protection under Title II, Section 203
of the Trade Act of 1974. This is a
legitimate step under our laws, and I
want to emphasize that I am in no way
criticizing it. The U.S. International
Trade Commission (ITC) will decide in
early June whether steel imports have
been a significant cause of serious injury
to our steel industry and, if so, will recom-
mend action to the President in early
July. It would be inappropriate for me to
comment on the merits of this case until
the ITC has submitted its report and the
President has made his decision.

But the other proposal is much more
serious, and I have no hesitation in speak-
ing out against it. In fact, I feel obliged to
do so because the "Fair Trade in Steel
Act" is dangerous to the health of the in-
dustry. The "Fair Trade in Steel Act"
would limit steel imports to 15% of con-
sumption. Whatever you think of that,
listen to this: the act would require the in-
dustry to submit to the Secretary of Com-
merce an acceptable plan to invest
"substantially all of the cash flow from

the steel sector for reinvestment in, and
the modernization of, the steel sector."
The bill further provides for oversight of
these plans by the Secretary of Com-
merce and requires him to make annual
determinations as to whether the im-
plementation of the investment plan is
satisfactory.

If such a bill had been on the books a
couple of years ago, the diversification
which most major steel companies have
embarked upon could not have taken
place. If the bill is enacted, the industry
will cede to the government effective con-
trol over investment decisions— precisely
the situation in state-owned steel in-
dustries. This is bad enough on its face,
but it is even worse that the statute
would direct the industry's funds ex-
clusively to steelmaking instead of allow-
ing the individual firms to find the most
remunerative uses of their funds. This
kind of managed investment would not
enable our firms to reduce costs to the
level of those in countries like Korea. I
urge any of you who have been sym-
pathetic to the "Fair Trade in Steel Act"
to take another look at it. It represents a
threat of government industrial planning
and direction that would kill forever any
hope of vitality and strength in the steel
industry.

Problems of Government Intervention

Whether it's the seizure of steel mills, the
pillorying of steel company executives, or
building trade barriers, government in-
volvement in the affairs of the steel in-
dustry will not strengthen the steel
industry but will only hurt the industry
and the whole economy. Among the many
reasons why this is true, I will single out
three.

First, one of the laws of physics ap-
plies also to trade policy: every action
generates an equal and opposite reaction.
In the trade area I can't guarantee that
the reaction will be equal, but I can guar-
antee that it will be opposite. And in
trade matters, there are two opposite re-
actions, one domestic and one foreign. As
Bethlehem Steel and the United Steel-
workers make their case for import con-
trols, the auto industry, the machine tool
industry, the home appliance industry,
the construction industry, and other users
of steel will be making the case for unfet-
tered trade in steel. Some of them will
make the point that limits on imports of
steel will increase their own production
costs and make them less competitive
with imports in their own sectors. Some
spokesmen for the steel-consuming indus-
tries may take another tack and argue
that the steel industry certainly needs

August 1984

ECONOMICS

protection from import competition, but,
of course, their industry will also need to
be protected. And they will have a good
point. The 19th-century humorist Ambrose
Bierce in his Devil's Dictionary defined a
tariff as a "tax on imports designed to
protect the domestic producer against the
greed of his consumer." This definition
applies equally to quotas.

As to foreign reactions, we can be
sure that any restrictions on our imports
will be answered with restrictions on our
exports. We, ourselves, retaliate for
foreign restrictions on our exports, as we
have a right to do under the rules of the
General Agreement on Tariffs and
Trade-the GATT. Other countries act
the same way. When the cycle of action-
reaction is completed, a competitive
American exporter will find its profitabil-
ity cut in order to pay for the protection
given another domestic industry. For ex-
ample, last year the United States im-
posed tariffs and quotas on imports of
specialty steel. In reply, the European
Community raised barriers to our exports
of sporting equipment, fire and burglar
alarms, and certain chemicals. What our
import controls did was transfer benefits
to the makers of specialty steel from the
makers of chemicals, sporting goods, and
alarms.

The second reason why government
intervention will hurt the industry and
the economy, not help them, is that
government intervention will make the in-
dustry less competitive than it would be if
left alone. There is a very dramatic dif-
ference between the average cost of labor
in the American steel industry, reported
by the American Iron and Steel Institute
to be around $21 an hour, and the average
cost of labor in other American manufac-
turing industries, reportedly from $10 to
$12 an hour. (It is perhaps worth noting
that the cost of labor in the steel sector in
Japan is about $12 an hour, and in Korea
it is about $4 an hour. To make matters
worse, The New York Times recently
reported that our steel mills require'l3
man-hours to produce a ton of steel,
whereas the comparable figure in Japan is
8.) I realize that the unions and companies
in your industry have slashed labor costs
by 19% in just 1 year; that was a truly
remarkable achievement and merits
strong commendation. But that $21 figure
is also remarkable and not so commend-
able. When our steel firms return to prof-
itability, as is generally expected later
this year, there will be renewed pres-
sures for wage increases.

It is my hope that whatever needs to
be done with regard to labor costs in the
U.S. steel industry will be done by the
parties concerned without government in-

tervention and certainly without the
presumption that the U.S. Government
will try to validate labor contracts by in-
sulating steel producers from foreign
competition. Note that I am not saying
what, if anything at all, must be done;
that is a judgment for the industry and
the unions. But if steel firms decide that
they cannot compete with wage costs as
they are, they must be prepared to do
what is necessary to change those costs in
the give-and-take of collective bargaining
with the unions. They should not ask
government to pressure the unions or to
penalize consumers or other industries.

My third reason why government in-
tervention will hurt, not help, involves
the relationship between import protec-
tion and industrial adjustment. It is
popular to argue that if the government is
going to restrict competition for the
benefit of domestic producers (and the
detriment of domestic consumers), then
the government must ensure that
domestic producers apply the "tem-
porary" benefits to modernize and ra-
tionalize their particular industry. I have
already described this phenomenon when
I talked about the "Fail- Trade in Steel
Act." Normally, industries seeking pro-
tection are quick to give the government
pledges of desire and intent to restruc-
ture. They say that they merely lack the
profitability to do so without projection
from imports. The restructuring plans
never suggest the development of dif-
ferent lines of business, the steady
phasedown of capacity in the protected in-
dustry, or the elimination of inefficient
companies. In many instances, obviously,
these are precisely the actions that would
make the most sense. It is universally
assumed (probably correctly) that an in-
dustry must persuade the government
that it will do the same things better,
rather than do new things, if it is to ob-
tain protection from import competition.
This means that protection not only ex-
tracts a price from consumers but also
acts as a drag on the economy by lessen-
ing pressure for technological innovation,
directing resources away from more pro-
ductive sectors, and encouraging manage-
ment to look to government, rather than
the market, for guidance.

I want to be clear: I am aware of the
fact that adjustment probably means a
loss of jobs in some industries, but in a
healthy economy that loss will be more
than compensated in other sectors. I am
conscious of the importance of the steel
industry to our national defense, hut ad-
justment is not terminal. What we need
for a strong defense is a strong economy
which can support the defense expen-
ditures; we can't afford to debate guns or

butter, nor do we need to. A healthy
growing economy will provide guns and
butter. For steel, in particular, our na-
tional defense requires an industry that is
lean and mean, rational, efficient, and
competitive in a truly global steel in-
dustry.

The World Steel Industry

Without doubt, steel is the quintessential
example of global industry. The steel in-
dustry was a leading force in the rapid
economic expansion that followed the
Second World War. At the end of the
war, about half of the world's steelmaking
capacity was in the United States, but
new steel plants soon were established in
Europe and Japan and then in the
developing countries, particularly in Asia
and Latin America. By 1982, only about
13% of steelmaking capacity was in the
United States, 1(5% was in Japan, and 19%
was in the European Community; so
about half of total world capacity was in
the free world. The communist countries
have only about 28% of world capacity.
Among the developing countries, Latin
America has about 15%, and the develop-
ing countries of Asia about 9%.

Not only is steel a global industry, but
the steel market is a world market. As is
true of other manufacturing industries,
world steel production is gradually in-
creasing in a number of developing coun-
tries, while production in Europe, the
United States, and Japan is shrinking.
This phenomenon has happened in other
industries in the past, and it will happen
in the future. Indeed, it is through this
evolutionary process that the major in-
dustrial countries, including the United
States, developed from exporters of raw
materials only to major exporters of
manufactured goods.

It is doubtless true that some develop-
ing countries have made uneconomic in-
vestments in steel and have unwisely
channeled resources away from more pro-
ductive sectors so that they could join the
ranks of the steelmaking nations. It is,
nevertheless, also true that a number of
the developing countries have significant
natural advantages, for example, rich
deposits of iron ore and coal, cheap
energy, and relatively inexpensive labor,
which attract investments in steel. Steel
capacity in the developing countries has
doubled in the short period of 8 years. It
has been estimated that during the next 2
years capacity in Latin America alone will
increase another 15%.

The response of the developed coun-
tries to the rise in the production of steel
by less developed countries has been
gradually to reduce capacity and employ-

Department of State Bulletin

ECONOMICS

ment. The European Community em-
ployed 895,000 steelworkers in 1970 but
by 1982 had reduced that figure by 409%.
During the same period, the number of
Japanese employed in the steel industry
dropped by 19% . Peak employment in
steel in the United States was 550,000 in
1977. By 1982 the number was barely half
that, at 289,000. Most notable has been
the adjustment undertaken in the United
Kingdom, where the number of workers
now employed in the steel industry is
only 25% of what it was in 1970.

In the European Community the
reduction of capacity in the steel sector
has been directed by public authorities
and subsidized with billions of dollars.
Restructuring in the United States,
however, is being carried out by the steel
firms themselves without government in-
terference and at no direct cost to the tax-
payer. It is the decisions of your com-
panies and your unions relating to invest-
ment, rationalization, modernization,
diversification, labor relations, executive
compensation, and the closure of ineffi-
cient facilities that have pointed the in-
dustry as a whole in the direction of
renewed profitability.

The improving health of our steel in-
dustry is the best answer to those who
say that the governments of the steel-
producing countries should organize and
manage world trade in steel. Trade in
steel should continue to benefit from the
impulse of the market and should not be
exempted from the sound rules embodied
in the General Agreement on Tariffs and
Trade. Those industries that have not
been subject to the healthy discipline of
the GATT continue to experience over-
production brought about by subsidiza-
tion and protection against competition
from imports. The same fate awaits any
industry' that tries to establish a cartel or
otherwise manage and control trade in its
products. The economic health of the
country can only suffer.

The Reagan Administration and the
Steel Industry

The Reagan Administration will resist
the cartelization of steel trade. It will also
enforce the laws which neutralize any ar-
tificial competitive advantages of foreign
firms, whether from government sub-
sidies or from selling at prices below costs
of production. If we could count on a
perpetual flow of such foreign assistance,
perhaps we could just relax and accept
the "generosity" of foreign taxpayers.
But we can be certain that subsidies and
dumping would not continue if our in-
dustry were crippled, so we cannot allow
that to happen. The neutralization of the

artificial advantages is not protectionist;
quite the contrary. Such measures
enhance the efficiency of the market by
"correcting" price distortions.

The United States participates ac-
tively in consultations on steel in the
Organization for Economic Cooperation
and Development (OECD) and in the
work of the OECD Steel Committee.

In both the Steel Committee and the
Committee on Export Credit, we will con-
tinue to press for an end to government
subsidies in export financing and more
specifically in the export of steel manufac-
turing facilities. If the buyers and sellers
of steelmaking plants and equipment can-
not raise the necessary funds for new in-
vestment on the international financial
markets, the markets are telling them
something. It is foolish and wasteful for
developed countries to compete with each
other to supply subsidized credit to build
new steelmaking facilities which will not
make profits adequate to cover the cost of
capital on international markets.

I have been stressing the importance
of keeping the government out of deci-
sions which properly belong to the steel
industry, but I do not want to convey the
impression that the Reagan Administra-
tion is indifferent to the fate of the in-
dustry. When the Administration took of-
fice, spokesmen for the steel industry
stressed that they faced four major prob-
lems: unfairly traded imports, high ex-
penses for p.^'lution control, disruptive
taxation, and crippling constraints to sen-
sible mergers. After 3 years of effort by
the Administration, the situation is quite
different— though not yet as different as
we hope to make it.

First, on trade policy, we have
scrupulously enforced our trade statutes
and now have in effect a wide range of an-
tidumping and countervailing duties on
steel from many countries, including
developing nations. It is sometimes
charged that our laws against unfair
trade are not enforced. I reject that
charge; but I suggest that trade laws, no
matter how meticulously enforced, cannot
solve the basic problems facing your in-
dustry (or any other industry).

Second, our regulations for control-
ling pollution have been rationalized with
a consequent reduction in costs to your
companies. This is part of President
Reagan's broader commitment to reform
regulatory codes so that they are less
burdensome to business and the economy.

Third, the Reagan Administration
and the Congress have made giant strides
in easing the tax burden on business.
Depreciation schedules for the steel in-
dustry have been significantly shortened,

with savings of millions of dollars for the
industry. Many more millions of dollars
have been saved through the safe-harbor
leasing provisions of the Administration's
1981 Tax Equity Act.

Fourth, The Administration recog-
nizes that steel is a global industry in a
global marketplace, and we are sympa-
thetic to industrial mergers which prom-
ise increased efficiency without seriously.,
diminishing competition. This is evi-
denced by the approval recently given to
the revised merger proposal of the LTV
Corporation and Republic Steel.

Conclusion

By far the most important thing for the
steel industry is the general economic
recovery. The dramatic decline of infla-
tion, the rapid advance in employment,
and the broad increase in demand all
point to better days ahead for the steel in-
dustry and for the economy generally.
This Administration will continue its fight
to see that the responsibility for the
future of the steel industry remains in the
hands of the steel industry, so that the
tremendous strength of the free-
enterprise, free-market system can ad-
vance the well-being of your companies,
their employees, and their shareholders,
along with the prosperity of the nation as
a whole. ■

August 1984

ECONOMICS

The Near West: America
and the Pacific

by W. Allen Wallis

Address before the World Affairs
Council in Pittsburgh on May 9, 1984.
Mr. Wallis is Under Secretary for
Economic, Affairs.

Since I am an economist, it will not sur-
prise you that from the three foci of your
meeting— economics, politics, and securi-
ty—I have selected economics. And since
this meeting is about Asia, it will not sur-
prise you if I discuss our evolving
economic relationship with Asia, how it
differs from our relationship with Europe,
and what we and our Asian partners can
do to maximize the mutual benefits from
our relationship.

First, I will consider what has been
described as a shift in the focus of U.S.
foreign policy from the Atlantic to the
Pacific. Second, I will touch on the
reasons why Asia has captured our atten-
tion and become so attractive to our
traders and investors. Finally, I will com-
ment on the direction of economic policy,
both in the U.S. and in Asia, that will pro-
mote solid and enduring ties.

U.S. Focus on the Pacific

Last month the French newspaper, Le
Monde, quoted a famous American as say-
ing that "Western history began with a
Mediterranean era, passed through an
Atlantic era, and is now moving into a
Pacific era." Indeed, our geography and
the quest for economic growth inevitably
have pushed our center of gravity west-
ward. America has had a Pacific coast
since 1819, and the population center of
America moves steadily toward it with
each succeeding census.

Recent events spotlight this trend.
President Reagan has crossed the world's
largest ocean four times in the past 6
months. Vice President Bush even now is
visiting in the Orient. I have traveled to
Asia three times in the past 6 months-
heading the U.S. delegations to the
U.S.-ASEAN [Association of South East
Asian Nations] economic dialogue, to our
economic consultations with Korea and
with Japan, and accompanying Secretary
[of the Treasury] Regan to the meetings
of the U.S.-China Joint Economic Com-
mission. A list of high-level official
travelers to the region would illustrate
the emphasis the Reagan Administration
places on our Pacific relationships.

This emphasis is explained by today's
economic realities. For two decades,
Japan has been our largest overseas
trading partner; it is the largest foreign
purchaser of American goods, after
Canada. The United States and Japan
combined account for over one-third of
the world's total gross national product.
They are the two most significant
developers and producers of high
technology. In the 21st century, we are
likely to be both the world's major
economic competitors and the world's ma-
jor economic partners. Since the late
1970s, trade with our East Asian and
Pacific partners has exceeded our trade
with Western Europe. In 1983 this
transpacific trade was $26 billion larger
than our trade with Europe. Of our 20
largest overseas customers, seven are in
the East Asian and Pacific region. Our
European friends wonder where this
leaves them.

Ironically, I received the invitation to
speak to you the day before I left for a
trip to Europe. (I have traveled to
Europe six times in the past 6 months.) In
Europe I noticed that the press was filled
with speculation about an American tilt
toward Asia and away from Europe. I
want emphatically to dispel that notion.
The Reagan Administration certainly will
not swap Europe for Asia in our foreign
policy portfolio. A strong Atlantic alliance
is, and will remain, vital to our economic,
political, and security interests. We can-
not, however, ignore the Soviet buildup in
the Pacific. We have interests in Asia as
well as in Europe.

Our ties with Europe go far beyond
economics and security. Probably more
than 90% of this audience traces its
ancestry to Europe. We share with
Europe a common culture, literature,
music, art, science, legal system, and
economic system. We inherited our
political ideals from Europe. We are prob-
ably closer to Europe and Europeans now
than at any time in our history, and it
would be a sad thing, indeed, if the ties
should weaken.

Traditionally, we have thought of
Asia as the "Far East." We looked far,
and we looked east, across Europe to
Asia. Now we look west, across the
Pacific, to Asia. East Asia and the Pacific
region have become the "Near West."

While our cultural ties are not so
strong with Asia as with Europe, they
are neither new nor insignificant. Asian

immigrants contributed significantly to
the unification of our country by rail and
to the development of Pacific coast
agriculture. An important and growing
number of Americans boast of Asian
ancestry. They have become leaders in
business, government, education, science,
and the arts, and they participate in forg-
ing new and stronger links between
America and Asia. In declaring this week
"Asian Pacific American Heritage
Week," President Reagan said
"Americans who have come from Asian
and Pacific countries have added a special
quality to the United States. . . . This
Nation owes a debt of gratitude to the
Asian and Pacific immigrants. Their de-
sire for liberty strengthens and under-
scores our own."

More times than we care to
remember, Americans have joined Asians
fighting for freedom in Asia and the
Pacific. Our commitments to the security
of the region are designed to prevent hav-
ing to fight there again. Fortunately,
most countries in the region share our in-
terest in a secure and stable environment
for growth and development.

For many reasons the Asian and
Pacific region is vital to the
United States.

• The Soviet threat hangs over the en-
tire region. As the President has noted,
this is a growing concern to all freedom-
loving states in the region.

• Vietnamese aggression in Kam-
puchea is perceived by all of Southeast
Asia as a threat, particularly to Thailand.

• North Korea remains hostile toward
the South three decades after the official
"cessation" of hostilities on the peninsula.

• The Republic of Korea in the south
is not only a key ally but also provides a
striking contrast between its market
economy and the totalitarian society to
the north.

• The six countries of the Asso-
ciation of South East Asian Nations
form a political and economic grouping
which has taken a united stand in oppos-
ing Soviet-backed Vietnamese aggression
in Indochina. We are strengthening our
economic cooperation with ASEAN as a
group and individually.

• Thailand provides refuge for hun-
dreds of thousands fleeing aggression,
while struggling to overcome formidable
challenges. Our continued support of this
front-line state is critical.

• Malaysia provides us with important
strategic materials and has great poten-
tial for vigorous economic development.

• Singapore is a stable and growing
city-state which provides a striking
example of the effectiveness of a free
market svstem.

Department of State Bulletin

ECONOMICS

• Indonesia is the fifth most populous
lation in the world and a major supplier
if our imported petroleum.

• The Philippines hosts two important
American military bases, as well as a
significant amount of American private
nvestment.

• Newly independent Brunei boasts
he highest per capita income in the
•egion, derived from its petroleum.

• Taiwan continues to be a major trad-
ng partner, despite the absence of official
rovernmental ties.

• Hong Kong is a true miracle of the
narket, converting barren mountains into
>ne of the world's leading trade and finan-
cial centers.

• Improving relations with the Peo-
jie's Republic of China is a major element
)f our regional policy. China's shift
toward a more open and decentralized

conomy is important for Western trade
and investment.

• Australia and New Zealand are
longstanding allies with key economic
inkages to Japan and to the region as
i whole.

• Finally, the Pacific includes ter-
ritories administered by the United

States that are important to us
trategically.

Trade and Investment

So much for my brief survey of the
region. Many of you have visited some of
those places, possibly first as members of
our military. Fortunately, the weight of
American involvement has shifted signifi-
cantly to trade and investment, bringing
new challenges for both cooperation and
competition.

Those of you involved in foreign trade
understand well the importance of our
growing economic ties to Asia, but most
of the rest of us are prone to forget the
growing impact of the international
I economy on our lives. Exports now repre-
I sent 20% of U.S. industrial output, about
t twice the proportion of 12 years ago. One
out of three agricultural jobs and one out
I of eight manufacturing jobs is export
I related. It is estimated that our $52
I billion in sales last year to the East Asian
! and Pacific region provided 1.3 million
I American jobs. Many companies in the
| Pittsburgh area depend on exports for
their survival.

What factors account for the economic
dynamism of this vast region?

By almost every measure we can
devise, Asia is a region of diversity.
When we cite broad statistics, we obscure
this diversity. When we use terms like
"East Asia and the Pacific," we
sometimes forget that we are not dealing

with a homogeneous entity. Not only are
the countries I mentioned spread over a
large portion of our globe, they vary
widely in area. Several are roughly the
size of the United States, but some are
smaller than Pittsburgh. In population
they range from China, with over a billion
people to the tiny ministates of the Pacific
Islands. In language and culture,
Australia and New Zealand share our
roots, and the rest of the region is a rich
tapestry of ethnic, cultural, and linguistic
variety. Their economic systems range
from the nearly pure laissez-faire
capitalism of Hong Kong to the rigid
Marxist control of North Korea.

Levels of development vary widely as
well. Economic size and influence range
from Japan with a per capita GNP of over
$9,000 to Burma with a per capita GNP of
less than $200. The three OECD [Organi-
zation for Economic Cooperation and
Development] members of this region
(Australia, Japan, and New Zealand) have
standards of living similar to ours. A
group of rapidly industrializing economies
in Asia have that goal clearly in sight. A
few countries in the region still have
serious developmental problems, and
their people have yet to enjoy the
benefits of the modern world.

This very diversity attracts us to the
region and gives it the force and energy—
the "dynamism"— that we are addressing
today.

Beyond the diversity, we find some
common characteristics, especially in the
economic sphere. The most successful
economies of the region have obviously
studied the growth and development of
the West. There is a growing application
in Asian and Pacific nations of those
economic principles which have served
America so well. Where these have been
adopted, economies are growing rapidly
and becoming more attractive to our
traders and investors.

Let me comment on a few of the prin-
ciples that have promoted better-than-
average economic performance.

The first is willingness to rely on the
market. The most successful economies in
the region have free-market orientations
with major roles for private enterprise.
Among the developing economies of the
region, this is particularly evident in the
ASEAN countries and also in Korea,
Taiwan, and Hong Kong. We see this
trend even in countries without free-
market orientations. The President noted
just last week, for example, that China
too is moving toward market incentives to
spur production.

The second factor that has created
economic growth in Asia is effective
utilization of Asia's most abundant

resource— people. It is well known that
Asia has a large population. It is less well
known that the human resources in many
of these countries have been carefully
nurtured. Literacy rates vary greatly
among the nations in the region but
average about 70% in developing Asia,
well ahead of South America and Africa.
Population growth rates are lower than
the average for low- and middle-income
countries as a group. The people are
healthy; average life expectancy, at just
over 62 years, is higher than in other
developing regions of the world.

Third, sound financial management
has helped protect Asian countries from
crises like those that have plagued other
areas of the world, especially Latin
America. The ratio of debt service to ex-
ports is the lowest of any region— under
16% in 1982. The ratio of outstanding debt
to exports, near 80%, is also the best in
the world.

Finally, a solid technological base has
resulted from the high priority placed on
scientific and technical education. On the
upper end of the scale, Australia and New
Zealand are modern industrial democra-
cies with a scientific tradition similar to
our own. Science and technology in Japan
have evolved to their present impressive
stages from a base established well before
the Meiji restoration of 1868. The Asian
less developed countries have used
bilateral and multilateral assistance effec-
tively to acquire the technology they
needed to achieve rapid growth in
agricultural and industrial productivity.
Trade and investment have replaced
foreign assistance as primary forces for
growth. Both have become effective
vehicles for introducing modern
technology.

These principles, applied effectively
by skilled leaders, have created vibrant,
growing economies that serve their
citizens well and contribute to the well-
being of the world in general. As a group,
the economies in the East Asia and
Pacific region outpaced the rest of the
world in the 1970s. Equally as important
is their resilience in bad times. During the
recent recession, economic growth con-
tinued in much of this region, though
more slowly.

There is no question that the
economies of this region are tough com-
petitors. You in Pittsburgh already know
that well. We do well to remember,
however, that our suppliers, as well as
our customers, are important to our
economy. Pacific Basin suppliers provide
a vast array of basic materials, intermedi-
ate goods, and finished products. Ninety
percent of our natural rubber comes from
the region, which also supplies large

August 1984

ECONOMICS

amounts of wool, tin, bauxite, and oil. We
import from this region significant quan-
tities of meat and dairy products, sugar,
and plywood, as well as a wide variety of
manufactured goods which we American
consumers find attractive. While Asian
and Pacific producers are competition for
some American producers, they meet
critical supply needs, help keep our prices
down, and enable the United States to
sell more to them.

Trade and investment have largely
supplanted the need for foreign assistance
in many East Asian countries. This is
what economic development is all about.
r>y whatever method we use to measure
American investment in the region, it is
clear that American businesses are forg-
ing ever stronger links with our Pacific
Basin trading partners. Estimates are
that American private investment in East
Asia and the Pacific jumped some $4
billion in 1981, to a total estimated at
nearly $30 billion.

Investment climates in the region
generally are favorable to foreign invest-
ment. Where problems still exist, virtual-
ly all the market economies are making
improvements. The Reagan Administra-
tion has taken positive steps to ensure
that American investors are treated fairly
throughout the world. An energetic pro-
gram, led by Ambassador William Brock
[U.S. Trade Representative], to negotiate
and conclude bilateral investment
treaties, is the hallmark of this effort. The
ASEAN countries (Malaysia, Singapore,
Thailand, Indonesia, Brunei, and the
Philippines) together have absorbed over
$10 billion in American private invest-
ment. China continues to attract Ameri-
can companies. Agreements reached dur-
ing the President's visit will open even
more opportunities in that vast market.
We naturally welcome the fact that
trade and investment are supplying the
capital and technology once provided only
by foreign assistance. We can be proud,
nonetheless, of the results of the
assistance we have given to countries in
the region. To put this in proper perspec-
tive, however, I note that the total of all
economic assistance ever given by the
United States to Korea is approximately
equal to American exports to Korea in
just 1 year. For Taiwan our total past
development assistance amounts to only
half a year's exports to Taiwan. Both of
these graduates of American economic
assistance now have impressive aid pro-
grams of their own.

These few examples of the success
stories of a remarkable part of the world
clearly demonstrate that the Asian and
Pacific region will be important to the
well-being of Americans. For a long time

to come, we must be vigilant to manage
constructively the frictions that in-
evitably accompany broad and complex
ties among nations.

Direction of Economic Policy

Rising protectionist sentiment at home
and abroad is the greatest threat to con-
tinued growth in East Asia and the
Pacific. Much of my time at the State
Department is devoted to encouraging
our trading partners to open their
markets to foreign competition. While the
world is still far from a free trade Utopia,
we are making progress. Japan captures
most of the headlines. While we are still
engaged in complex negotiations with the
Japanese, we have seen progress since
the President's visit there 6 months ago.
Korea has unilaterally lowered trade bar-
riers. American firms, including banks,
are already benefiting, but we will con-
tinue to press for more liberalization. In
December, at the U.S.-ASEAN economic
dialogue, I discussed with ASEAN
leaders the mutual benefits of trade
liberalization. Ambassador Brock is ac-
tively exploring with his ASEAN col-
leagues innovative ideas for reducing
trade barriers between ASEAN and the
United States. Worldwide, we are seek-
ing a new round of multilateral trade
negotiations in the GATT [General Agree-
ment on Tariffs and Trade]. We will press
for further tariff reductions and elimina-
tion of nontariff barriers. Countries in
Asia, led by Japanese Prime Minister
Nakasone, are supportive of new negotia-
tions in the GATT.

During his trip to Asia last November,
President Reagan stated succinctly the
case for free trade:

. . . protectionism is defensive and
dangerous. Erecting barriers always invites
retaliation, and retaliation is a threat to the
une out of every eight American jobs depend-
ent on our exports. At the end of this vicious
cycle are higher costs for consumers and lost
American jobs, the exact opposite of what we
all want.

Let's recognize Japanese and Korean effi-
ciency for what it is. If their products are bet-
ter made and less expensive, then Amsricans
who buy them benefit by receiving quality and
value. And that's what the magic of the
marketplace is all about.

This Administration is committed to
free markets. Experience shows that this
is the most beneficial policy not only for
the United States but also for the Asian
and Pacific nations.

Where we see Americans disadvan-
taged by protectionism in Asian markets,
we will press for changes. Where trade
barriers exist in less developed countries,

we will argue that trade must be expand-
ed through tariff reductions among those
countries themselves. We will also press
for the continuation of generalized
preference schemes in developed nations.
Our own generalized system of prefer-
ences legislation is currently before the
Congress. The Reagan Administration
strongly supports renewal.

New and innovative international
business relationships will be required to
meet the challenges of the future. I men-
tion in passing the increasingly complex
legal problems which may affect our abili-
ty to cooperate and may damage our abili-
ty to compete. How we manage such
issues as "unitary tax," antitrust, bank
secrecy, and trade sanctions will be
crucial to our success in developing a
mature economic relationship with Asia.
At home, the President has pledged
to the American people that he will strive
to keep our markets open to competition,
both domestically and internationally.
From an economic standpoint, that is the
prudent course regardless of what the
rest of the world may be doing. Nonethe-
less, we are dedicated to seeking progress
in creating new opportunities for
American exporters through further
liberalization of the world's trading
system. Asia's dynamism is traceable to
the willingness of many countries in the
region to adopt market-based economic
policies like those which have served us
so well. As these countries become
serious competitors, we must treat them
as new export opportunities. Above all,
we must not abandon our own adherence
to the principles of competition and open
markets.

Conclusion

I said I would concentrate on economics
and I have. I am an economist, after all;
but a few words on political and security
matters.

Political stability and security in the
Pacific region are obviously vital to our
own security. It is also true that the
political situation in the region has made
possible its spectacular economic growth.
At the end of the Second World War, the
United States controlled the Pacific
Ocean region militarily. We converted our
military supremacy into formal security
arrangements with Japan, Australia, New
Zealand, the Philippines, and others. To-
day there are new challenges to our
Pacific relationships. The Reagan Admin-
istration has taken steps to buttress the
old ties and to reach new levels of
understanding with friendly nonaligned
nations, for example China.

Department of State Bulletin

EUROPE

I began my remarks by quoting a
'amous American who said that Western
listory began with a Mediterranean era,
massed through an Atlantic era, and is
ow moving into a Pacific era. That
American was not one of our contem-
poraries. It was Theodore Roosevelt in a
speech he gave after he had, as he put it,
ust chipped the Philippines away from
Spain." If we were moving into a Pacific
era then, now we have arrived in the
Pacific era, led by our burgeoning
economic relationship. ■

Cyprus: Reports of
Turkish Cypriot
Settlement in
Varosha

DEPARTMENT STATEMENT,
JUNE 4, 19841

We now have evidence that the Turkish
Cypriots are permitting settlement by
some of their people in a formerly closed
sector of the city of Varosha, or
Famagusta.

The area involved is in a portion of
the city which has remained uninhabited
since the Turkish military intervention
of 1974. The settlement by Turkish
Cypriots in the area establishes a prece-
dent which we believe will prove
unhelpful to the search for a fair and
final settlement in the Cyprus problem.

We have urged the Turkish Cypriot
communities' leaders not to proceed with
this action and urged all parties to the
Cyprus question to avoid any act which
might complicate the situation as the
UN Security Council prepares to con-
sider renewal of the UN peacekeeping
mandate for Cyprus, which expires
June 15.

We are hoping that mandate can be
renewed with minimal debate and that
the Secretary General can then proceed
with his good office's role in the search
for diplomatic progress.

Soviet Active Measures

'Read to news correspondents by acting
Department spokesman Alan Romberg. ■

by William E. Knepper

Address before the Chicago Council
on Foreign Relations on May 30, 198b.
Mr. Knepper is Deputy Assistant
Secretary in the Bureau of Intelligence
and Research.

I'm delighted to be here and appreciate
this opportunity to help shed some light
on one of the aspects of Soviet
clandestine activities which attempt to
influence world public opinion. One of
the activities that falls within the pur-
view of my new responsibilities has been
an interagency working group on Soviet
active measures. To us "active
measures" means unorthodox and covert
Soviet and Soviet-bloc efforts to affect
political attitudes and influence public
opinion in the noncommunist world.
State chairs the group which includes
representatives from several agencies in-
cluding the Defense Department,
Federal Bureau of Investigation, and
U.S. Information Agency. Among its
several responsibilities, the group is
charged with identifying forged
documents prepared by Soviet KGB
[Committee for State Security]
operatives or the closely coordinated
East European or Cuban intelligence
services.

Our Embassies abroad have as a
priority requirement reporting likely
forgeries that may appear in the press
or be circulated privately among influen-
tial foreign leaders and opinionmakers.
Our active measures working group
meets every other week to review the
"surfacing" of possible forgeries any
place in the world. Confirmed forgeries
are officially denied and publicly exposed
in discussions such as this one.

Larry Eagleburger, who retired
May 7 as the Under Secretary of State
for Political Affairs — the highest rank-
ing position then held by a career officer
in the State Department — wrote in a re-
cent article:

Soviet Active Measures need to be
countered by public exposure. They are infec-
tions that thrive only in darkness, and
sunlight is the best antiseptic. Governments
should make available to their publics as
much as possible of our growing knowledge
of Soviet practices.

Overview

Before we see some examples of
forgeries, let's look behind the cloak of
secrecy with which the Soviets seek to
shroud their intelligence operations.

The term "active measures" itself is
a literal translation from the Russian
aktivnye meropriyatiya. That's the name
of the organization in the KGB's First
Chief Directorate responsible for
worldwide direction of these activities.
As the Soviets use the concept, active
measures encompass a wide range of
practices, including disinformation,
manipulating the media in foreign coun-
tries, the use of communist parties and
communist front groups, and other
operations to expand Soviet political in-
fluence. Unlike overt Soviet diplomatic
and informational efforts, active
measures usually involve an element of
deception and frequently employ
clandestine means to mask Moscow's in-
volvement.

Intelligence operations and prop-
aganda can be grouped in three
categories; white, black, and gray.
White refers to openly acknowledged
government positions, policies, and
statements. Black operations are sup-
posedly never officially acknowledged or
attributed. Gray affairs fall somewhere
in between.

Looking at the whole spectrum of
Soviet foreign policy, diplomatic, trade,
and informational programs may be con-
sidered white or overt activities. The use
of procommunist fronts, local communist
parties, or traditional media information
outlets fall into a gray category.
Spreading rumors, planting false stories,
surfacing forgeries, and use of agents of
influence — collaborators, voluntary or
paid — are black or clandestine opera-
tions. Active measures thus involve
either gray or black operations, depend-
ing on the specific circumstances.
Characteristic of Soviet active measures
is their wide scope, geographic spread,
and persistence over time, as well as the
frequent use of fabricated documents to
underpin disinformation operations.

As a policy tool, active measures
trace back to the 1920s when the
Soviets sought to discredit emigre
groups in Western Europe, particularly
in France, by spreading disinformation.
They also lured emigre activists back to
Russia through various subterfuges.

August 1984

EUROPE

Some of you may have watched last fall
on PBS the 10-part series, "Reilly, Ace
of Spies." A character in the series was
lured back to his death in Russia by a
supposed exile organization, "The
Trust," which was in reality a KGB
black operation. Even before the 1917
revolution, the tsarist secret police
employed similar deception techniques.
They used agents abroad not only to col-
lect intelligence but also to sow dissent
among emigre groups of that era. They
also gave covert subsidies to selected
journals to stimulate a better press for
imperial Russia.

After World War II, the Soviets in-
stitutionalized these activities. They
established a disinformation unit — De-
partment D — within the First Chief
Directorate of the KGB, the Soviet
overseas intelligence arm. In the 1960s,
the term "active measures" first ap-
peared when the Soviets changed the
name of Department D to the Active
Measures Department. The switch con-
veyed that the scope of the department's
activities was far broader than mere
dissemination of false stories in the
press or floating forged documents.

Some of our best information on
Soviet and Soviet-bloc intelligence opera-
tions is provided by defectors. In 1968

the one-time chief of the disinformation
section of Czechoslovak intelligence,
Ladislav Bittman, defected and has pro-
vided unusual insights into active
measures operations. Bittman recounts
that one of the main aims of Czech ac-
tivities was to brand West German of-
ficials as Nazis. But he was also involved
in anti-U.S. operations taking place as
far afield as Indonesia and central
Africa.

Bittman's experience underscores
the close cooperation between the
Soviets and satellite intelligence serv-
ices. Indeed, it is often difficult to know
whether the Soviets or one of their sur-
rogates are implementing an operation.
Since their overall purpose is the same,
the difficulty in differentiating a Russian
from an East German or Cuban effort is
an interesting challenge but not really
significant.

In the mid-1970s, the KGB active
measures department was upgraded to a
"service," a further indication of the im-
portance the Soviet leadership attached
to active measures. This change meant
that the chief of the service would have
KGB general officer rank. The timing of
the shift in the mid-1970s suggests a
connection with Soviet disappointment
with the fruits of detente — during which

Baltic Freedom Day

PROCLAMATION 5209,
JUNE 14, 19841

It has been over 40 years since invading
Soviet armies, in collusion with the Nazi
regime, overran the three independent Baltic
Republics of Estonia, Latvia, Lithuania and
forceably incorporated them into Moscow's
expanding empire. The new regime then
ordered the illegal deportation, murder, and
imprisonment of tens of thousands of Baltic
peoples whose only "crime" was to resist
foreign tyranny and to defend their liberties
and freedoms.

Oppression and persecution continue to
this day, but despite this long dark night of
injustice, the brave men and women of
Estonia, Latvia, and Lithuania have never
abandoned the battle for their national in-
dependence and God-given rights. Although
the full measure of their struggle and
sacrifice is screened by the oppression and
censorship under which they live, the friends
and families of the Baltic peoples all over the
world are aware of their heroic endeavors
and aspirations.

Their peaceful demands for their rights
command the admiration of everyone who
loves and honors freedom. All the people of
the United States of America share the just
aspirations of the Baltic nations for national

independence, and we uphold their right to
determine their own national destiny free of
foreign domination. The United States has
never recognized the forceable incorporation
of the Baltic States into the Soviet Union,
and it will not do so in the future. The Con-
gress of the United States, by Senate Joint
Resolution 296, has authorized and requested
the President to issue a proclamation for the
observance of June 14, 1984, as "Baltic
Freedom Day."

Now, Therefore, I, Ronald Reagan,
President of the United States of America,
do hereby proclaim June 14, 1984, as Baltic
Freedom Day. I call upon the people of the
United States to observe this day with ap-
propriate remembrance and ceremonies and
to reaffirm their commitment to the prin-
ciples of liberty and freedom for all oppressed
people.

In Witness Whereof, I have hereunto
set my hand this fourteenth day of June, in
the year of our Lord nineteen hundred and
eighty-four, and of the Independence of the
United States of America the two hundred
and eighth.

Ronald Reagan

1 Text from Weekly Compilation of
Presidential Documents of June 18, 1984.

time forgeries had fallen off sharply. It
indicated renewed willingness to employ
deception techniques on a larger scale in
support of Soviet aims. Reflective of
this, the Carter Administration was
targeted with an upsurge of active
measures, frequently involving fake U.S.
documents. These were particularly
directed against the U.S. -Egyptian rela-
tionship and the Camp David process.
Organizationally, the KGB Active
Measures Service has the primary role
of backstopping foreign active measures
operations, which are directed in general
terms at the Politburo level— the summit
of the Soviet hierarchy. The service is
organized along functional and geo-
graphic lines with roughly half a dozen
departments. It is believed to employ
directly about 300 people. They monitor
ongoing active measures around the
world; process proposals for new opera-
tions; maintain liaison on active
measures with KGB regional and coun-
try desks and with overseas operations;
and provide technical support for opera-
tions through preparation of forgeries
and fabrications, translation of
documents, and printing and publication
of materials.

Our best view under the Soviet
cloak of secrecy has been provided by
Stanislav Levchenko, a former KGB
major and active measures specialist
who defected to the United States in
1979 while working as a "journalist" in
Japan. At the time of this defection,
Levchenko was acting chief of the active
measures section of the KGB "residency"
in the Soviet Embassy in Tokyo. He
supervised five case officers or KGB
operatives. They, in turn, ran a string of
25 agents of Japanese or third-country
nationalities. Levchenko was sentenced
to death by a Soviet military tribunal
meeting in secret in August 1981. He
has declared open opposition to what he
views as ". . . the corrupt Soviet
system." The Soviets are preventing his
wife and teenage son from joining him
in the United States.

According to Levchenko, KGB
"residencies" or foreign stations
operating under diplomatic cover in
Soviet Embassies or missions consider
active measures part of their core opera-
tional work, along with espionage.
Residencies submit proposals for new ac-
tive measures and assessments of old ac-
tivities in the annual plan sent to
Moscow every December. Residencies
can take the initiative in proposing new
operations to take advantage of per-
ceived opportunities at any time during
the year. Final approval, however, rests
with KGB headquarters as approved by

Department of State Bulletin

EUROPE

the Politburo. Moscow can, of course, in-
struct residencies to undertake active
measures at any time.

Most official or quasi-official Soviet
representatives abroad are likely to be
involved from time to time in active
measures. Even Soviet scholars, journ-
alists, and representatives of the
Russian Orthodox Church, who are often
accepted abroad as legitimate counter-
parts by their non-Soviet colleagues, also
often engage in these types of active
measures. Unlike their free-world
counterparts, they often must play a
dual role. Their legitimate academic or
other pursuits sometimes play a sub-
sidiary role to their political activities on
behalf of the Kremlin. They are required
to obey instructions from the bodies
which plan and control Soviet active
measures.

While the specifics of active
measures vary widely, Levchenko
stresses that all are specifically designed
to reinforce Soviet policy objectives in a
particular country or region. The United
States and NATO are the Soviet Union's
principal worldwide targets. However,
as Major Levchenko's activities in Japan
show, other countries are also on the
receiving end of active measures.

When Levchenko defected, he was
ostensibly working as a correspondent
for the Soviet news magazine, New
Times. He found cover as a journalist to
be especially useful for active measures
operations, since it provided broader ac-
cess than more traditional diplomatic
cover.

Ideally, the KGB seeks publication of
disinformation in reputable noncom-
munist media. The Soviet press then
replays the story, citing credible sources.
It may also be replayed elsewhere, for
example by wire services or others un-
aware that they are repeating disinfor-
mation. Sometimes the KGB runs disin-
formation in pro-Soviet news outlets.
This is in the hope that the phony story
will gain acceptance through frequent
repetition, even though the initial surfac-
ing vehicle lacks credibility.

Spreading rumors is perhaps the
crudest form of active measures. This
was done on a considerable scale by both
the Axis and the Allied nations in World
War II. In recent years, there are in-
dications that the Soviets may have
resumed the practice. In 1979 after the
seizure of the Grand Mosque in Mecca
by religious fanatics, U.S. Embassies
picked up numerous reports that the
Soviets were falsely spreading the word
to Arab contacts that the United States
was implicated. Levchenko told the
House Permanent Select Committee on

Berlin's Status in
European Parliament Elections

The following is a joint response by
France, the United Kingdom, and the
United States to the Soviet Union's pro-
test on Berlin's participation in the elec-
tion to the European Parliament. The
allied response was read by Department
of State spokesman John Hughes on
June 15, 19&U-

On instructions of my government, I
would like to state the following with
regard to the statement of the U.S.S.R.
Ministry of Foreign Affairs of June 11,
1984:

The three powers, in accordance
with the established procedures and in-
sofar as is compatible with allied rights
and responsibilities, in 1957 approved
the extension to the western sectors of
Berlin of the treaty establishing the
European Economic Community (EEC).
On the same basis they subsequently ap-
proved the extension to the western sec-
tors of Berlin of other constitutive
treaties of the European Community.
Consequently, the western sectors of
Berlin have since 1957 been included in
the area of application of these treaties.
The three powers have throughout that
period ensured that allied rights and

responsibilities, including those relating
to matters of security and status, were
not affected by developments in the
European Community. The Quadripar-
tite Agreement in no way affected the
application in the western sectors of
Berlin of the European Community
treaties.

Direct elections to the European
Assembly, in the work of which
representatives from the western sec-
tors of Berlin have participated since its
inception, were provided for in the EEC
treaty of 1957. As in the past, repre-
sentatives from the western sectors of
Berlin will continue to be included within
the quota of the Federal Republic of
Germany at the assembly. They are not
directly elected but are selected by the
Berlin House of Representatives^. In
these circumstances it is clear that con-
tinued participation of Berlin represen-
tatives in the European Assembly does
not affect the status of Berlin. Such par-
ticipation can therefore not constitute a
violation of the Quadripartite Agree-
ment.

In conclusion, my government re-
calls the importance which the three
powers attach to avoiding complications
in and around Berlin. ■

Intelligence that he personally partici-
pated in several operations to spread
rumors in Japan directed against the
People's Republic of China. One such ef-
fort was to suggest secret collusion on
nuclear matters between the Chinese
and the Italians.

Forgeries

Many disinformation operations gain ac-
ceptance by showing tangible "proof."
Fabricated documents and forgeries are
provided as "evidence." In some cases a
Soviet role in manufacturing these docu-
ments may be uncovered by content and
forensic analyses of the document, the
method of surfacing, the relative level of
sophistication of the forgery, or its near-
ly instananeous replay by the Soviet
media. While it is not entirely clear why
the Soviets have made forgeries such a
specialty, the fake U.S. Government
document has become a postwar hall-
mark of Soviet disinformation opera-
tions. In 1961 then CIA Assistant Direc-
tor Richard Helms told the Senate
Judiciary Committee that some 32

forgeries of U.S. Government
documents had been uncovered during
the preceding 4 years. These ranged
from fake high-level plans on Middle
East policy, involving Secretary of State
John Foster Dulles and then New York
Governor Nelson Rockefeller, to false
Pentagon documents alleging that most
U.S. strategic bomber pilots were
medical wrecks.

Nineteen years later in February
1980, John McMahon, a successor to
Helms as chief of the CIA's clandestine
service, told the House Intelligence
Committee a similar tale of fabricated
U.S. Government documents. He provid-
ed background on the renewed Soviet
surfacing of forgeries following the
establishment of the Active Measures
Service in the mid-1970s. McMahon
elaborated on some two dozen forgeries,
such as a series intended to create fric-
tions in U.S. -Egyptian relations.

Since 1980, the KGB forgery curve
has continued to rise. According to CIA
testimony before the House Intelligence
Committee in 1982, and our own State

August 1984

EUROPE

Department reports on Sovi.
measures, 4 forgeries surfaced in 1980,
7 in 1981. 9 in 1982, and 12 in 1983-or
over 30 since 1980. In addition, several
earlier forgeries have been purposely re-
iced a number of times.
The technical quality of re
forgeries has h over earlier KGB

products. The formatting is on the whole
good, certainly sufficient to decer
those unfamiliar with U.S. Government
documents. There are, howe\
always some discrepancies and mistakes.
It is difficult for an outsider to duplicate
U.S. Government documents with total
accuracy, given the frequent changes in
form and procedures. (It's even difficult
for us insiders to do it "by the book"—
skilled secretaries and word processors
are highly prized.) While the American
English in most forged documents is col-
loquial, there are occasional linguistic
flaws, use of stilted language or of
British rather than American phrases or
spelling. In some instances, literal trans-
lations expose the likely Soviet author-
ship. In a fake U.S. document that was

aced in Nigeria, the term "wet af-
fair" was used to describe a proposed
assassination. "Wet affair" is the euphe-
mism in the Soviet intelligence lexicon
for "assassination." In a letter from the
New Orleans-based aviation personnel
agency to the South African Air Force
chief, the term "competent bodies" is
, id. "Competent bodies" is the way the
Soviets describe their security services.

In contrast to the 1950s when the
So\ often satisfied with surfac-

. ries in the communist press, in
recent years the KGB has sought publi-
cation in noncommunist media. When
successful, this enhances the credibility
of the disinformation operation and pro-
vides more believable sourcing for replay

.mmunist media. A number of re-
spected noncommunist journals have
been victimized by fabrications during
the past 2 years.

The ometimes surface

forgeries through blind mailings sent to
newsmen with no return addi
other indication of the sender's identity .
This is a random affair since most
serious media outlets will either n

mously sent documentor, at
ihr lea heel efo >rin1 ing Fhe
Soviets also use journalists working as
KGB a: > dis-

info to plant I

her gullible or un-
to acce] '

authenticity of a iimenl with

Ling.

Some fabrications are circulated
privately and do not seem intended for
publication in the media. This method
prevents the alleged author from finding
out about the forgery and thus is unable
[eny the document's authen-
ticity.

Many fabrications never attain un-
critical publication or surface only in

viunist or procommunist journals;
still, forgeries are one of the most

■ ilar tools of disinformation. One
reason forgeries are so frequently used
is the difficulty in rebutting them effec-
tively. The United States or other of-
iV ni led parties can forcefully deny fabri-
cations. However, once published, a

, frequently assumes a life of its
own. Either the denial does not catch up
with the original false report or a few
people are willing to believe the story
simply because it is in print.

Now let's review several examples of
forgeries that dovetail with Soviet
propaganda themes.

• Probably the most enduring set of
forgeries are the so-called Holocaust
papers, designed to create tension be-
tween the United States and our Euro-
pean allies. This is a collection of altered
and authentic U.S. war plans that date
from the early 1960s. The papers allege
that the United States would sacrifice
Western Europe by nuclear bombing
strikes during a prospective world
war III to save the continental United
States. The papers surfaced initially in a
Norwegian magazine in 1967. More
recently, they were the subject of ques-
tions in the town council of Graz,
Austria, in December 1982. At least 20
separate surfacings have been identified.

The Soviets received at least some
of the authentic documents from an es-
pionage agent, a U.S. Army sergeant.
The sergeant was stationed in Paris as a
military courier in the early 1960s. In
1965 he was tried and convicted of es-
pionage and given 25 years in prison. He
passed a wide variety of U.S. documents
to the Soviets, some of which still occa-
sionally appear in altered form.

• In November 1981 an attempt was
made in Madrid to surface a forged let-
ter from ['resident Reagan to the King
of Spain. The forgery was technically
well done with the correct White House
stationery and typescript. In terms in-
tended to offend Spanish sensitivities,
the letter urged the King both to join
NATO and to crack down on groups
such as the "Opus Dei pacifists" and the

1 wing opposition."

Alter an initial blind mailing to
Spanish journalists failed to obtain

publication, the forgery was circulated
on November 11 to all delegations (ex-
cept the U.S. and Spanish) to the Con-
ference on Security and Cooperation in
Europe (CSCE) then meeting in Madrid.
This time several Madrid newspapers
ran stories that exposed the letter as a
fabrication, probably of Soviet origin.
• This forgery of an alleged June
1979 letter from then NATO Com-
mander Alexander Haig to NATO Secre
tary General Joseph Luns surfaced in
April 1982. The letter discusses a possi-
ble nuclear first strike and calls for
"... action of a sensitive nature to jolt
the faint hearted." The letter is intended
to stimulate the nuclear disarmament
campaign by suggesting a Haig-Luns
collusion against opponents of the
modernization of nuclear forces in
Europe. Technically, the quality is good
but does include mistakes, such as inap-
propriate stationery and also the "Dear
Joseph" greeting instead of the "Dear
Joe" habitually used by General Haig.
The forgery was surfaced in a leftist
Belgian weekly and reported to Belgian
television and radio. Its appearance coin-
cided with numerous antinuclear demon-
strations in the spring of 1982.

• In January 1982, a forged letter
and an accompanying research analysis
dated September 23, 1981, from Judge
William Clark, then Deputy Secretary of
State, to the U.S. Ambassador to
Greece, Monteagle Stearns, was sur-
faced in Athens. This forgery indicated
U.S. support for the conservatives in the
October Greek elections. It alluded to a
possible military coup if socialist leader
Andreas Papandreou won at the polls
(as he did). On the basis of Embassy
assurances that the letter was a fake, it
was not initially published. Several
weeks later, after copies had been circu-
lated at the CSCE in Madrid, a small
Athens daily published it. However, the
daily described the letter as of doubtful
authenticity and probably attributable to
a "third-country" intelligence service.

• Two faked 1982 telegrams were
allegedly from the U.S. Embassy in
Rome. They depict the Italian investiga-
tion of a possible Bulgarian connection
in the assassination attempt against
Pope John Paul II as a campaign orches-
trated by the United States. The forgery
appeared in a leftist Rome newsweekly
in late July 1983. The cables are cleverly
done and read much like State Depart-
ment cables. An exception is the use of
the term "spynest Sofia" and various
technical formatting errors. The fabri-
cation apparently was designed to pro-
vide "credible evidence" for Soviet media
allegations that the United States had

Department of State Bulletin

GENERAL

orchestrated the arrest of the Bulgarian
intelligence officer, Antonov, as part of
an effort to blame the Soviets and
Bulgarians for the papal assassination
attempt.

• Another active measure alleging
military cooperation with South Africa is
a forged letter from the U.S. Defense
Mapping Agency, addressed to a Lt.
Gen. Dutton, South African Defense
Force. This purports to be a positive
reply to a South African request for
satellite-produced maps and charts of
Angola, Zambia, and Mozambique. Let
me point out that Lt. Gen. Dutton has
not held a command in the South
African forces for years. There are
many other features about this letter
which indicate that the Defense Mapping
Agency would never have written it,
such as curious and ungrammatical
punctuations— even for U.S. Govern-
ment bureaucratese. The word "con-
cretize" is used, which is similar to a
Russian word in general usage.

• Jeune Afrique, an influential
French-language newsweekly published
in Paris and widely read in Francophone
Africa, reported on November 17, 1982,
that despite the U.S. embargo on arms
sales to South Africa, Northrop Aviation
was offering to sell South Africa its new
Tigershark fighter. To "prove" the point,
Jeune Afrique published a picture of a
letter ostensibly sent by Northrop's vice
president for marketing to the com-
mander of the South African Air Force.
When Northrop called the letter a fake,
Jeune Afrique ran a new story on
January 19, 1983, suggesting that the
denial was untrue and the original letter
was authentic.

In this case, the perpetrator of the
active measure apparently obtained a
copy of a genuine letter that Northrop
had routinely sent to many countries,
but not to South Africa, and simply
typed in the South African addressee.
The purpose of this active measure was
to suggest that the U.S. embargo on
military sales to South Africa was a
sham. The envelope also had a 20C
stamp— not enough to reach South
Africa.

• Tn. Lima, Peru, last year a report
surfaced that the United States was
planning to sell nuclear-tipped cruise
missiles to Chile. Nothing, of course,
could be further from the truth. The ob-
vious intent was to stir up trouble be-
tween Peru and Chile and make the
Peruvians suspicious of and antagonistic
toward the United States. The report
was based on a fake airgram appearing
there. The Peruvians quickly realized
that an attempt was being made to dupe

them, and nearly every newspaper in
Lima denounced the report as a forgery,
most likely of Soviet inspiration.

Impact of Active Measures

The box score for disinformation and
other media influence efforts is mixed.
Despite extensive KGB active measures
operations, it is hard to perceive any
major impact on well-established, non-
communist, Western media outlets. Most
fabrications or disinformation efforts are
able to achieve publication only in
obscure journals or in those known for
their predilection for the Soviet line.
Probably more damaging are repeaters.
Even though exposed, through repeated
surfacing and occasional uncritical publi-
cation, the impression can be created
that "where there is smoke, there is
fire."

Unfortunately for the United States,
the Soviets have had much more success
with active measures in the Third
World. In Africa and South Asia, in par-

ticular, they have probably significantly
added to U.S. image problems. Over the
years, the KGB and its allies have
developed well-established outlets to
float disinformation. They also have had
considerable success in arranging for
press plants of distorted news stories in
Africa.

In gauging the overall impact of ac-
tive measures, it is important to view it
through Soviet, not just American, eyes.
The Soviets, as Levchenko points out,
take a long-term view. They are not
seeking immediate, short-term gains or
necessarily a big impact from any one
operation. Rather, they regard active
measures like pawns in a chess game,
able to damage the opponent at the
margin. If Dr. Goebbels espoused the
technique of the "big lie," the Soviets in
active measures operations have more
modest aspirations. They take the long-
term view and by all accounts appear
satisfied that the cumulative impact
makes their considerable investment
worthwhile. ■

Doctrine of Moral Equivalence

by Jeane J. Kirkpatrick

Address before the Royal Institute
for International Studies in London on
April 9, 198U- Ambassador Kirkpatrick
is U.S. Permanent Representative to the
United Nations.

I am honored by the invitation of the
Royal Institute for International Affairs
to appear here today. I thought a good
deal about what I might speak about and
was greatly tempted to offer a lecture on
American presidential nominating poli-
tics, about which not too long ago I wrote
a large book. I decided, however, it was
not quite appropriate. The famous cracks
within the alliance that are so much
discussed in public presented themselves.
It is clear there exists on both sides of the
Atlantic a growing sense that we have
come again to one of those periodic times
of decision: Will we continue as we are,
working in and through the existing
framework, or is it time for new
departures?

Not all issues that are discussed in
public places make their way onto a
legislative calendar. Some simply die. But
widespread public interest in an impor-
tant subject, if not a harbinger of official
changes to come, at least gives notice of

that possibility. Articles on the "crisis" of
the alliance have become a staple of the
editorial pages in the United States and
Europe. In the European press, these ar-
ticles usually deal with U.S. faults and
raise questions whether our policies and
our rhetoric do not make the world more
dangerous— for Europeans. The U.S. ar-
ticles deal with European shortcomings
and question whether it makes any sense
at all for the United States to go on in-
vesting people and money in the NATO
enterprise.

I should like to emphasize that there
is no discussion in the U.S. Government
of withdrawing American troops from
Europe or changing American strategic
doctrine. Nonetheless, op-ed pieces about
the alliance multiply and influential per-
sons join the dialogue. Only last week,
after I had begun to think about this
statement, The Wall Street Journal
featured a column on anti-Americanism
by a Swiss diplomat which paraphrased
Lord Acton: "Dependency corrupts, and
absolute dependency corrupts
absolutely." Recently also, James
Schlesinger and Helmut Schmidt had a
widely reported public dialogue in
Brussels. Henry Kissinger has suggested
the time may have arrived for Europe to
assume the responsibility for its own
defense against conventional attack, time

August 1984

GENERAL

to draw down or withdraw entirely the
300,000 U.S. troops in Germany. The per-
sistence of the unofficial discussions made
it almost inevitable that officials would
join the discussion. That has happened.
Under Secretary of State Lawrence
Eagleburger has recently addressed the
issues in two public fora. I propose today
to enter this discussion at a somewhat dif-
ferent point.

Naturally, being an American and an
official of the U.S. Government, I shall
speak from an American perspective, but
my subject is not only the United States.
I shall try to speak to the same subject
addressed here in Britain by my col-
league, Secretary of Defense Caspar
Weinberger, concerning whether there is
or is not a moral difference between the
so-called "superpowers"— the United
States and the U.S.S.R. But this subject
is, I think, only a subtopic (albeit a ter-
ribly important one) of a more general
question: whether there is a significant
moral difference between the democratic
countries of the West and the communist
countries of the Eastern bloc. Many,
perhaps most, of the most influential
treatments of East-West differences dur-
ing the last decade or so propose tacitly,
and sometimes explicitly, that the dif-
ferences are not that great after all.

Europe

First, there was the vogue enjoyed by
theories of converging development not
long ago, which argued that the dynamics
of modernity would force increasing
openess and liberalization of the Soviet
Union and, at the same time, force pro-
gressively autocratic centralization in the
industrial democracies in such a way that,
before long, both would become modified
bureaucratic autocracies presided over by
technocrats with a feel for popular
desires. When "things" seemed not to
develop as predicted, the convergence
theory was shelved without comment to
be replaced by a more aggressive argu-
ment that required less cooperation from
history: now it was argued that in fun-
damental moral respects the democracies
and communist states were already much
alike, a position that simultaneously
denies the virtues of the democracies and
the vices of the totalitarian systems of the
East. This position, too, threatens, as
Raymond Aron emphasized in his impor-
tant book In Defense of Decadent Europe,
to undermine the virtue of the Western
nations, the ". . . capacity for collective
action and historic vitality that now, as
always, remains the ultimate cause of the
fortunes of nations and of their rise and
fall."

Recently, another Frenchman, Jean-
Francois Revel, has sounded a more
urgent alarm. In his book, Comment les
Democraties Finissent, Revel wonders
aloud if democracy may not be a mere
parenthesis in the long march of
autocracy, ". . . the first system in history
which, confronted by a power that wants

to destroy it, accuses itself " Revel

further wrote:

The distinctive mark of our century is the
humility with which democratic civilization
agrees to disappear and works to legitimize
the victory of its mortal enemy.

That communism shall have been more
clever and effective in its offensive would only
be one additional example of one power being
a better strategist than the other. ... It is less
natural and newer that the targeted civiliza-
tion should not only judge that its defeat is
justified, but provide its partisans as well as
its adversaries ample reason to regard all
forms of self-defense as immoral, or at best
superfluous and useless, if not downright
dangerous.

Revel's subject is the delegitimization
of the West, which he believes is in
danger of becoming a willing victim. My
subject is the delegitimization of the
United States by and within the West. I
am concerned not with the charges of our
adversaries, who accuse us of the most
terrible crimes, but rather with the grow-
ing tendency inside the political class of
our allies in Great Britain and continental
Europe to feel that, after all, in many im-
portant respects, there may not be signifi-
cant differences between the Soviet
Union and the United States.

It is difficult for an American to raise
such questions without sounding defen-
sive, but the subject is too important to
be pushed under the rug.

To illustrate my meaning, to dispel
any suggestion that my impression of the
situation is illusory or exaggerated, I
shall take as my text three recent com-
ments: one from the Guardian, a second
from the Observer, the third from a
leading politician.

First, the Guardian, which printed on
October 28:

There are plenty around who are already
prepared to see the U.S. as no better than the
Soviet Union in the standards of its interna-
tional behaviour. There are many more,
however, who still expect superior standards
of the U.S., who are shocked and bewildered
at the spectacle of Americans engaging in an
act of aggression quite as blatant as the Soviet
invasion of Afghanistan, which was deplored in
such fine-sounding words.

Next, the Observer, in its leader of
October 30:

. . . Reagan should be told that when the
U.S. borrows Soviet methods . . . European
distrust of American behaviour, which lies at
the root of the peace movement, is vastly
reinforced.

And finally, these comments from a
political leader who provided unwelcome
confirmation that extreme distrust of the
United States displayed by the peace
movement, in some of its forms, was
shared in high political circles. Concern-
ing threats to the peace, he was reputed
to have said: "There is an almost
miserable equity of threat;" or, in another
formulation, an "equity of menace."

The suggestion that the United States
and the Soviet Union are morally
equivalent, that with regard to methods
and policies there is a rough moral sym-
metry, is now common enough among our
closest allies that its expression no longer
causes shock in Europe. Obviously, this is
a serious matter. We are democratic coun-
tries in which broad consensus is required
to sustain foreign policy. If the opinion
that the United States is a lawless,
reckless gunslinger spreads widely
enough, the alliance will simply collapse
by mutual consent based on distrust on
the European side and disgust on the
American side.

As I understand it, the charge that
there exists a moral symmetry between
the United States and the U.S.S.R. has
taken form only in the past year or so,
with Grenada, Central America, and
missile deployment serving as landmarks
in its evolution. Less harsh but still
serious charges had been around for some
time. Chief among them was the convic-
tion that the United States— especially
under Ronald Reagan— is obsessed with
East-West relations and that viewing the
world through the lenses of East-West
conflict causes us to see political conflicts
where there may be none and obscures
more important indigenous, basic social
and economic factors and predisposes us
to emphasize bilateral approaches over
broader international cooperation and
military solutions where economic and
social remedies would be more appro-
priate. Now, on behalf of the U.S.
Government, and very formally, I should
like to enter a plea of "not guilty" even to
this charge, which, though serious, is less
than those associated with the doctrine of
moral symmetry.

Assistance Programs

And, though we could spend the rest of
the day on this subject alone, let me note
briefly that our economic assistance pro-
grams alone belie the charge that U.S.

Department of State Bulletin

GENERAL

foreign policy is driven by a preoccupa-
tion with East- West conflict. The United
States is a major supporter of multilateral
assistance programs. We remain the
largest contributors to UN independent
agencies and special programs, such as
the UN Development Program, UN In-
ternational Children's Emergency Fund,
World Food Program, Food and
Agriculture Organization, World Health
Organization, and to the international
development banks and multilateral fiscal
institutions. The contrast between U.S.
and U.S.S.R. support for multilateral pro-
grams is important. But that is not all.

Today, as in the past, the United
States has a powerful proclivity for trying
to serve universal goals through its
foreign policy. Reluctant to become deep-
ly involved in foreign affairs in the first
place, we have always tended to feel that
our participation is justified only if it is
devoted to abstract universal ends like
"making the world safe for democracy"
and "abolishing war, hunger, chaos." We
are still at it, as demonstrated by
Secretary Shultz's statement to the Con-
gress this year on the foreign assistance
package. In that statement the Secretary
of State emphasized to U.S. lawmakers
that the proposed U.S. assistance pro-
gram for some $15.9 billion in economic
and military assistance in fiscal year 1985
serves four U.S. interests:

• Our interest in a growing world
economy which enhances the well-being of
citizens in both the developing and the in-
dustrialized world;

• Our interest in security, protecting
our vital interests abroad, strengthening
our friends, contributing to regional
stability, and backstopping our diplomatic
efforts for peaceful solutions to regional
problems;

• Our interests in building democracy
and promoting adherence to human rights
and the rule of law; and

• Our humanitarian interest in
alleviating suffering and easing the im-
mediate consequences of catastrophe on
the very poor.

My point is that, when we speak to
one another, we justify our assistance in
terms of trying to build a "world of
stability and progress." Contrast, I sug-
gest, our practices not only with the
Soviets, who limit their aid to military
assistance to countries who are members
of the Soviet bloc or ripe for incorporation
in it; compare our assistance programs
even with those of major allies who, to an
extent greater than we, use aid to rein-
force special relationships, for example,
with former colonies.

I seek no kudos when I say that the
U.S. assistance programs provide sub-
stantially more economic than military
assistance and only rarely are allocated on
the basis of U.S. national security in what
are called "superpower rivalries." I am
not even certain this is a wise allocation of
scarce resources. But it is a fact.

What is true for our assistance pro-
grams is true also for many other aspects
of our foreign policy. In Africa, for exam-
ple, the United States has worked hard
throughout this Administration and
previous ones to achieve, through
peaceful negotiation, an independent,
democratic, stable Namibia. Why? Not
because Namibia is a matter of vital U.S.
interest. It is not. It is on the other side
of the world. We have no significant
cultural or historical ties with it. The fact
is, we believe Namibia's right to in-
dependence should be achieved in a
negotiated settlement rather than
through the imposition of solutions by
force— by whomever.

Another recent example of U.S. ef-
forts to achieve relatively disinterested
goals through foreign policy may be seen
in Lebanon. A myth has already arisen
that the United States sought to impose a
military solution wholly inappropriate to
the problem, which, according to some
mythology, is based on historic, in-
digenous Lebanese rivalries. Nothing
could be more mistaken. In 1958 the
United States, seeing Lebanon's in-
dependence threatened by radical Arab
nationalism, sent 15,000 Marines to pro-
tect Lebanon's independence. In 1983 the
United States sent 1,500 Marines to a
joint peacekeeping effort with France,
the United Kingdom, and Italy, first, to
ensure the safe evacuation of the
Palestine Liberation Organization
(PLO)— hardly a goal sought by us
because we were trying to fit the conflict
into an East- West framework. The
multinational force (MNF) departed as
soon as that task was completed. But
after the Sabra and Shatila massacres,
the MNF returned in a classical peace-
keeping role, interposing itself between
factions all of whom, it was believed,
basically desired peace.

The effort was sabotaged by someone
else's determination to impose a military
solution but not that of the United States,
the other MNF parties, or Israel. Syria,
sending more than 100 tons of ordnance
daily into the Shouf, has very nearly suc-
ceeded in imposing a military solution. It
is symptomatic of the different ap-
proaches that President Assad, in his
search for a settlement, undertook no
shuttles in the manner of Ambassadors
Habib, Rumsfeld, or Secretary Shultz. He

sent armed emmissaries and waited for
peacekeepers to come to him. Various
criticisms may be made of our Lebanon
policy, but not, I think, that reflected a
preoccupation with East- West affairs nor
a predilection for military solutions.

Central America

But even if our whole policy is not
governed by obsession with East- West
rivalry, and even if we do not have an un-
controllable desire to impose military
solutions everywhere, surely in Central
America the United States reflects, in
purest form, all the worst tendencies of
U.S. foreign policy: seeing communist in-
fluence where there are only indigenous
social and economic factors; attempting
military solutions where only reforms are
appropriate.

Once again, I respectfully dissent.
The government headed by Ronald
Reagan has not the slightest tendency to
imagine that the political turmoil in Cen-
tral America has no roots in social and
economic problems. We know the people
of El Salvador, Honduras, Nicaragua, and
Costa Rica have been ill fed, ill housed, ill
clothed, and illiterate for centuries. We
know they have generally been governed
by bad governments, one-party systems
as under Somoza or military dictatorships
as in El Salvador before 1979. We know
that there existed in both countries
neglect, unmet needs, unfulfilled hopes,
and that these gave rise to movements for
reform and revolution. We understand,
broadly speaking, how it happened.

In both Nicaragua and El Salvador,
three political currents existed:

First, the traditional oligarchs who
had most of what there was to get;

Second, a large group of middle class,
farmers, trade unionists, businessmen,
who wanted to get rid of the dictator and
establish a democratic government; and

Third, a small group of Marxist-
Leninists tied to Havana and Moscow,
trained, as they themselves have told us,
in Havana, in the Middle East with the
PLO, or elsewhere in the Soviet bloc;
armed and advised by their Soviet
sponsors.

In Nicaragua, these two groups, the
democrats and Leninists, joined in a
broad-based popular front to overthrow
Somoza. Their program was democracy,
but once in power, the Leninists forced
out the democrats and betrayed the
promises of democracy made to the
Organization of American States (OAS)
and the Nicaraguan people. Most of the
democrats are now in exile; many are
with the Contras, still fighting for a

August 1984

GENERAL

democratic Nicaragua. The Leninists,
meanwhile, have consolidated one-party
control.

In El Salvador, where the same three-
sided contest existed, no popular front
was formed. Instead, after a coup over-
threw General Romero in October 1979,
the democratic forces came to power in
the administration of Napoleon Duarte,
who immediately undertook to democ-
ratize the government, nationalize credit,
and instigate sweeping land reforms; the
guerrillas and the traditional armed right
took up armed struggle against the
government— one operating out of
Managua; the other, it is said, out of
Guatemala.

The stakes are high. The Soviet
Union understood the strategic impor-
tance of the region, through which most
sealanes pass with most of the oil and
other strategic materials the United
States would supply to Europe in case of
an emergency. By 1967 the Soviets were
writing in theoretical journals about op-
portunities for tying down the United
States in the Western Hemisphere and
rendering us less able to act in such
remote places as Europe and Asia. The
United States, finally, has also
understood the stakes and the challenge
and believes that challenge must be met.

Here, concerning U.S. policy in Cen-
tral America, the charge of obsessive con-
cern with East-West relations melds im-
perceptibly into an argument that there is
no significant moral difference between
Soviet policy in Eastern Europe and U.S.
policy in Central America. This position
was put with clarity during the Oxford
Union debate by a questioner who asked:

Is it not true that your country controls in,
for example, the whole of Latin America,
many corrupt and puppet governments— and
surely the question we are asking you to ad-
dress yourself tonight is what is the difference,
if any— and I suspect there is no difference— as
do many, many people in this country— what is
the difference between your puppet regimes
and the puppet regimes of the Soviet Union?

In a followup exchange the questioner
charged Central American governments,
supported by the United States, with
"terrorizing, torturing, killing."

The first striking fact about views
such as those of the questioner is that the
level of outrage far exceeds the level of
information. The charges do not -quare
with the facts. The United States does
not, repeat not, support dictatorships in
Central America. Let me be specific. It it
not generally understood in Europe that
the United States tried hard to encourage
and help develop a democracy in
Nicaragua:

• By supporting the efforts to replace
Somoza and helping to negotiate his de-
parture—supporting the OAS resolution
that called for his ouster;

• By providing $25 million in
emergency food and medical aid in the
first week the Sandinistas came to power
and $115 million in generous, prompt
economic aid; and

• By offering assistance of diverse
kinds relevant to the development of
democratic institutions, even though the
Sandinista junta gave early signs of claim-
ing a monopoly of power and imposing
censorship. We also supported, inside the
international fiscal institutions such as the
Inter-American Development Bank,
Nicaraguan loan applications enabling it
to secure from these institutions more
assistance than the Somoza regime had
received from international fiscal institu-
tions in the previous 20 years.

The United States remains hopeful
that Nicaragua's government will decide
to cease destabilization of its neighbors,
relax repression, and expand freedom in
Nicaragua.

In El Salvador, it is well known that
the United States supported the coup
that brought down General Romero in
October 1979, installed Napoleon Duarte
and his Christian Democrats in office, and
sponsored the land reforms which were
designed by AFL-CIO specialists. From
that time forward, the United States has
encouraged and assisted a process of
democratic development in El Salvador,
which has been warmly supported by the
Salvadoran people— who walk for miles,
stand for hours, braving bullets and
threats to cast their votes in favor of
democracy in El Salvador. In a hundred
ways, the people of El Salvador continue
to demonstrate their lack of support for
the guerrillas whose violence has not YSon
the hearts or minds of the Salvadorans.
Violent minorities— relying on revolution
and not persuasion— can devastate the
economy, terrorize families and villages.
But in more than 4 years of trying, they
have not prevented the great majority of
Salvadorans from showing their opposi-
tion to politics of violence and extending
their support for democratic politics.

It is true that the United States has
strategic goals in Central America. We
believe it would be bad for the people of
the region and bad for the United States
for there to be installed one-party,
Marxist-Leninist states integrated into
the Soviet bloc and willing to have their
territory serve as bases for the projection
of Soviet military power in the hemi-
sphere. That is the strategic basis of our
policy. We also have serious political and
moral grounds for this position.

• We do not think it is moral to leave
small countries and helpless people
defenseless against conquest by violent
minorities which are armed and trained
by remote dictatorships. The amount of
Soviet-bloc arms funneled into El
Salvador is staggering. So is the
sophistication of the guerrilla command
and control system, including a special
communication system that guides the in-
surgency from outside Managua.

• We believe our political goal, a more
democratic and stable hemisphere, re-
quires building democracies, not the
multiplication of dictatorships.

The U.S. Government warmly sup-
ports the democratic governments of
Costa Rica and Honduras and works to
further democratic development in Cen-
tral America. To that end, the recommen-
dations of the Kissinger commission have
been translated into a legislative package
which has been submitted to Congress.
The package calls for a mix of social,
economic, political, and security
assistance, not unlike the support
package that helped to rebuild Europe
after World War II.

The U.S. Government agrees with the
National Bipartisan Commission on Cen-
tral America that:

Central America is both vital and
vulnerable and that whatever other cases may
arise to claim the nation's attention, the U.S.
cannot afford to turn away from that threat-
ened region. Central America's crisis is our
crisis.

We do see East-West dimensions to
that crisis. We do see external support as
well as indigenous social and economic
factors. We want to respond to all levels
of the problem. We do seek a negotiated
diplomatic solution. We support and have
supported a wide variety of diplomatic ef-
forts, the most important current one, the
Contadora process, to resolve the regional
problems within the region. We will con-
tinue to do so.

The time has come in this discussion
to confront the issue of using force. I am
aware that the United States is charged
today with displaying a proclivity for the
use of force to solve problems, a penchant
for military solutions. The proofs cited, as
I understand it, are our landing in
Grenada, which both we and the
Grenadans call a liberation, not an inva-
sion; our military assistance to the
Government of El Salvador; our presence,
through military maneuvers, in Hon-
duras; and our putative support for
Nicaragua's insurgents. Sometimes par-
ticipation in the multinational force in
Lebanon is also adduced to support the
view that the U.S. Government is headt

Department of State Bulletin

GENERAL

by gunslingers who would, in the words
of a famous American cigarette advertise-
ment, "rather fight than switch."

I desire to deal forthrightly with
these questions, beginning with Central
America. Let me turn, then, to Grenada
and the arms race.

The facts are not really difficult to
establish. El Salvador has been the object
of unceasing armed attacks by insurgents
whose identity, training, supplies, and
goals are clear. The leadership of El
Salvador's FMLN [Farabundo Marti Na-
tional Liberation Front] has been open
about their commitment to armed strug-
gle and prolonged war. An article by
Shafik Handal in the World Marxist
Review of fall 1980 straightforwardly ex-
plains that the FMLN has no interest in a
negotiated settlement, being persuaded
that full victory is within reach. Since
then, certain proposals for what they call
"power sharing" have been made— all in-
volve "restructuring" the government;
"purging" the armed forces, national
guard, and police; and otherwise assum-
ing power over the state. They have con-
tinued to this moment to reject utterly
"power sharing" based on free elections
held in the presence of international
observers. The reasons, doubtless, are
that they know they do not enjoy popular
support; and they do not, in any case,
recognize popular sovereignty expressed
through free elections as the legitimate
basis of a legitimate government.

Confronted with the need to combat
the guerrillas and also control violence
from other sources, the Government of El
Salvador requires arms, training, and
communications equipment. Otherwise, it
will simply be vanquished by superior
force, after which a new dictatorship will
be imposed on an unwilling people. There
is only one group seeking to impose a
military solution in El Salvador; they are
the guerrillas. It is all very well to argue
that persons of good will ought to be able
to find a peaceful solution peaceably. But
if one side makes surrender a precondi-
tion of peace, then the alternatives are
only to surrender or resist. We can, of
course, continue to try to persuade the
other party to reconsider. And that is
precisely what the United States has
done and is doing in El Salvador. Mean-
while, however, we believe it necessary
and acceptable to supply military
assistance needed to permit the govern-
ment to continue to resist guerrilla at-
tacks. Morality does not, indeed cannot,
require that we stand by passively while
a small nation— underequipped and un-
sophisticated—succumbs to well-armed
and trained guerrilla forces.

August 1984

More than El Salvador is at stake.
Subversion and violence have already
disrupted ordinary life in Costa Rica and
Honduras. Do we leave them essentially
defenseless against externally supported
violence? What of Chad? What of the
Sudan? Has the transvaluation of values
so far progressed that now, in the West,
it is not permissible to help countries help
protect themselves against armed subver-
sion and armed aggression?

From our side of the Atlantic, it
sometimes seems that in Europe there is
more sympathy for the Nicaraguans who
threaten the peace, independence, and
freedom of all their neighbors than for the
neighbors themselves. Sometimes it
seems there is more "understanding" of
the thousands of Cuban and Soviet-bloc
military advisers in Nicaragua— one of
whose tasks it is to direct the struggle
against El Salvador— than for the 37 or so
U.S. military advisers in El Salvador who
help that country fend off its would-be
conquerers. Sometimes it seems that
there is more enthusiasm for Nicaragua's
preparations for what gives every
evidence of being staged, rigged elections
than for El Salvador's earnest efforts to
have genuinely free elections under dif-
ficult circumstances. Sometimes it sounds
as though our friends are as inclined to
exaggerate America's minimal use of
force for limited, defensive purposes as
they are to minimize the Soviet bloc's
regular reliance on force to subvert and
overwhelm hapless, too often helpless,
Third World nations.

Grenada and Afghanistan

With the landing on Grenada, attacks on
the United States reached a crescendo.
Americans, it was asserted, were no bet-
ter than the Soviets. Invading Grenada is
no different than Argentina invading the
Falklands. One Member of Parliament
asserted there was an "uncanny
resemblance." Another charged:

If the governments arrogate to themselves
the right to change the governments of other
sovereign states, there can be no peace in this
world in perhaps the most dangerous age
which the human race has ever known. It is
quite improper for Hon. Members to condemn,
as we have, the violation of international law
by the Soviet Union in its attack on
Czechoslovakia and Afghanistan if we do not
apply the same standards to the United
States' attack on Grenada two days ago.

Obviously, we don't agree. Moreover,
we found it truly unbelievable that coun-
tries which were themselves so recently
liberated by force from the occupying
troops and quisling governments of Nazi
tyrants, or who participated in that

liberation, should have been unable to
distinguish between force used to conquer
and victimize and force used to liberate.
We believe we acted on solid legal
grounds to protect 1,000 American na-
tionals—some of whom we had good
reason to believe were in real
danger— and at the request of the Gover-
nor General and the Organization of
Eastern Caribbean States (OECS), which,
in turn, acted in accordance with its trea-
ty. We have discussed our view of the
legal grounds of our actions at length in
other arenas. I am concerned today with
the Grenada-Afghanistan analogy, which
is perhaps the clearest example of the
argument that there is no moral dif-
ference between the superpowers.

To argue that the use of force by the
United States in Grenada was equivalent
to the Soviet's use of force in
Afghanistan, it is necessary to overlook
the circumstances under which the two
"invasions" were undertaken, the policies
followed after the so-called "invasions"
took place, and the views of the populace
involved.

First, the circumstances— it is true
that the Soviet Union cited as justifica-
tion of its invasion of Afghanistan a sup-
posed request for assistance made by the
Afghan Government under the 1978
Soviet- Afghan treaty of friendship. But,
whereas United States and OECS forces
went to great lengths to protect and
rescue Sir Paul Scoon, who was in hiding
for his life and who is now alive and free
to verify his participation in invoking the
action— as well as to lay the groundwork
for free elections and the establishment of
constitutional government in
Grenada— the very first action of Soviet
forces in Afghanistan was the murder, by
a special Soviet assault team, of then-
President Hafizullah Amin, in whose
name they claimed to be acting.

Second, less than 1 week after the
military action in Grenada began, Gover-
nor General Scoon was beginning to lay
the groundwork for future free elections
and a return to constitutional govern-
ment. U.S. forces were reduced from
3,000 to fewer than 300 in a matter of
weeks. Four years after the Soviet inva-
sions of Afghanistan, there has never
been the slightest suggestion by Soviet
authorities or by the regime they in-
stalled in Kabul that free elections will
ever be held in Afghanistan. Moscow has
repeatedly declared that the "Socialist
revolution" in Afghanistan, i.e., the coup
of April 27, 1978, is "irreversible," has
refused to suggest any timetable for
withdrawal of its forces, has annexed por-
tions of Afghan territory, has built

MIDDLE EAST

massive permanent military installations,
and has thousands of Soviet personnel
making the actual decisions in nominally
Afghan Government offices.

Third, the people of Grenada have
welcomed U.S. and OECS forces as
liberators and are assuredly not fighting
against them; indeed, many, if not most,
members of the Grenadan Army and
militia laid down their arms and returned
to civilian life. It was outside occupation
forces— i.e., Cubans— who dug in and
fought, leading to ongoing suffering.

In Afghanistan, on the other hand,
Soviet forces numbering close to 125,000
are supported by a mere handful of com-
munist party functionaries dependent on
Soviet protection and are opposed by the
general population, who form the
resistance which has been fighting the
Soviet occupation for 4 years. Not even
the Soviet Union reported grateful
Afghans lining the streets of Kabul to
shout "God Bless Brezhnev."

The proof of the pudding is in the
eating. Not only did the students and the
people of Grenada welcome the American,
Jamaican, Barbadian, and OECS forces as
liberators but a recent poll in Grenada-
conducted by an American academic
organization not famous for its support of
the Administration— shows approximately
84% of the population both believed they
were in danger and were glad that U.S.
troops came to Grenada. The American
students feel the same way and still have
not forgiven the U.S. reporters whom
they accuse of failing to understand the
danger.

Conclusion

In conclusion, let me say that the most
important problem about the doctrine of
moral equivalence is that it eliminates all
the most important distinctions and con-
fuses almost all the important issues of in-
ternational affairs today. Take the arms
race: the very notion that there is an
arms race in the first place and not a
belated response to Soviet military
buildup is a problem. The very wide-
spread assumption that they respond to
our provocations is equally false; in fact,
we permitted them, as a matter of
deliberate policy, to gain parity. And,
having gained parity, the Soviets pro-
ceeded to accelerate further their arms
buildup, not to slow it down.

In thinking about the doctrine of
moral symmetry, I was reminded of the
doctrine of "tous azimuts, " which the
French Communist Party has advocated
from time to time in regard to the force de
frappe. It seemed to me that a doctrine of
"tous azimuts " in regard to moral quali-
ty is perhaps even more dangerous than
one with regard to nuclear weapons. If it
is no longer possible to distinguish be-
tween freedom and despotism— the
United States is a free society; between
consent and violence, we are a society
based on consent; between open and
closed societies, we are an open
society— then the erosion of the founda-
tion of a distinctively Western,
democratic civilization is already far
advanced and the situation is serious
indeed. ■

U.S. Position on Jerusalem

by Michael H. Armacost

Statement befort the Subcommittees
for Europe and the Middle East and In-
ational < > iterations of the House

i 'ommittee on June 21,
1984. Ambassador Armacost is Under
i for Political AffairsA

I appreciate the opportunity to meet
with the members of these subcommil

disi the Administration's posi-
•77. which provide
,S, Embassy and Ambassador's

n Israel to be moved froi
to lerusalem.
The i olved in this bill

important and
reaching implies
the MM. tie East. Before I outline the

reasons for our opposition to this bill, let
me describe the context from which we
approach this issue.

The United States has long been
Israel's closest friend and supporter. In
1948, the State of Israel proclaimed its
independence, and the United States
was the first country to extend it
recognition. We established diplomatic
relations and opened an embassy in Tel
Aviv, then Israel's seat of government.
Since then, the United States and Israel
have shared a special friendship whose
depth and uniqueness are recognized
throughout the world. No one can doubt
the commitment of the United States to
the security and well-being of Israel. No
one can deny that the Reagan Ad-
ministration regards a strong Israel not
only as a guarantor of security for its

people but as a close friend and valued
strategic partner to America and the
West. No one can discount or diminish
the many tangible steps taken by this
Administration to broaden and deepen
the scope of day-to-day friendship and
cooperation between Israel and the
United States.

I regret that the location of our Em-
bassy in Israel has been made the sub-
ject of legislative proposals. We
recognize the sincerity of the motiva-
tions of those sponsoring or supporting
the bill before the committee. We also
appreciate the special importance of
Jerusalem to Israel and to Jews the
world over. I am not here to take issue
with these facts. I do, however, want to
review with you the serious, sober, and
substantial reasons for our position on
the issue of our Embassy's location.

As you know, the United States has
consistently sought to encourage peace
in the Middle East through negotiations,
and we have consistently opposed ef-
forts to resolve Arab-Israeli differences
through force or unilateral actions. This
principled commitment of the United
States has helped preserve our ability to
serve as the only effective mediator be-
tween the parties.

Jerusalem is a city with deep
religious significance for Jews, Muslims,
and Christians throughout the world. Its
status is also one of the fundamental
issues Arabs and Israelis will have to
resolve if there is to be peace between
them. Precisely because of the key
mediating role we have played in the
past — and the interest we have in being
able to play such a role in the
future — our position on this sensitive
issue is of critical importance to the par-
ties. A change in the U.S. position on
the status of Jerusalem, we are con-
vinced, would seriously impair our abili-
ty to play a constructive role when the
parties resume the search for peace. In-
deed, it would complicate the resump-
tion of that process. Moving our em-
bassy to Jerusalem would be interpreted
by many as prejudging the outcome of
negotiations, thereby seriously eroding
our credibility as an honest broker.

Our Embassy has remained in Tel
Aviv for over three decades. This deci-
sion has not been capricious. The ra-
tionale has been found persuasive by
eight Administrations — Democratic and
Republican. Each has had to deal with
the Jerusalem question in one way or
another. Each has considered it a
mistake for the United States to endorse
or acquiesce in the effort of any state to
determine the status of the city
unilaterally.

Department of State Bulletin

PACIFIC

As early as 1949, when Israel began
to relocate government ministeries to
Jerusalem, we explained that we could
not accept its unilateral claim to the city
and could not move our Embassy there.
Again, in 1960, we informed Jordan of
our opposition to its making the eastern
part of the city Jordan's second capital.
We sought to preclude any unilateral ac-
tions that would prejudice a negotiated
resolution of the status of the city or its
reunification. The Israeli actions of 1967
to extend Israeli law and administration
to the eastern part of the city did not af-
fect the U.S. commitment to a
negotiated settlement of the status of
Jerusalem.

Surely, a key question for us all is
whether a move of the embassy would
improve, or harm, prospects of achiev-
ing the peace we all seek. We would not
have achieved the Camp David
accords — which led to Israel's first peace
treaty with an Arab state — if the United
States had adopted the position of either
Israel or Egypt on the subject of
Jerusalem. President Carter's separate
letter attached to the Camp David
accords reiterated the U.S. position that
the status of Jerusalem must be resolved
through negotiations. That position was
restated by President Reagan in his
September 1, 1982, Middle East ini-
tiative: "Jerusalem must remain undivid-
ed but its final status should be deter-
mined through negotiations." We remain
dedicated to encouraging the process of
such negotiations.

The bill before the committee also
raises serious constitutional problems. In
our view, it would be a direct in-
terference in the President's constitu-
tional authority to conduct foreign af-
fairs. The President has historically been
responsible for conducting diplomatic
relations on behalf of the United States.
This has included the determination of
where and through what means to con-
duct such relations and deciding ques-
tions of recognition. Legislation direct-
ing him to relocate an embassy would be
in direct conflict with this basic
principle.

I am fully aware of the frustrations
many feel because of our position on this
issue. Much as all of us in the Ad-
ministration understand this and regret
it, we must look at the long term. I am
convinced that in the long term it is
peace for Israel that will bring with it a
solution to the problem of the status of
Jerusalem. Throughout the history of
the State of Israel, the United States

has been committed to helping secure
for that nation a just and lasting peace.
We must continue to be able to play
what has become an indispensable role.

'The complete transcript of the hearings
will be published by the committee and will
be available from the Superintendent of
Documents, U.S. Government Printing Of-
fice, Washington, D.C. 20402. ■

U.S. Policy in the Pacific Island Region

President Reagan's responses to ques-
tions submitted by Pacific Magazine,
May Jf, 198i.1

Q. Is it possible to state in a few con-
cise words what the basic principles
and goals are of U.S. policy in the
Pacific island region?

A. First of all, we are part of the
Pacific island region. Hawaii, American
Samoa, Guam, and the Northern
Mariana Islands, which soon should for-
mally acquire commonwealth status,
make the United States of America a
permanent part of the area. In addition,
we continue to have a special relation-
ship with the Federated States of
Micronesia, the Republic of the Marshall
Islands, and the Republic of Palau.

Our relationship with the Pacific
island region is a partnership. We share
a strong belief in freedom and
democracy, respect for human rights,
and faith in the power of the free
market. We want to build on these
values to establish even better relation-
ships with the new nations of the
Pacific. And we want to help the
islanders keep the region free from ten-
sions and rivalries as it has been since
World War II.

Q. Is there any likelihood that in
the future there will be more U.S. aid
to the Pacific island nations, possibly
on a direct bilateral basis?

A. We intend to maintain a helpful
development assistance role, supple-
menting the larger programs of
Australia and New Zealand. We an-
ticipate that future U.S. aid to the
region will be at modestly increasing
levels.

Our assistance is available indirectly
through the Asian Development Bank,
the United Nations, and various regional
institutions. There are grants to local
and U.S. private voluntary organizations
for programs in the individual countries.

and of course, we have the U.S. Peace
Corps. The system seems to work quite
well. This approach provides a broad
range of U.S. assistance on a regional
and individual country basis.

I should also add that private
business can and will play a larger role
in the economic development of the
Pacific island region than aid from any
government. This theme was stressed in
my message to the South Pacific con-
ference held in American Samoa
IV2 years ago. The free enterprise
system is the best way to promote
growth and development. As far as
Micronesia is concerned, we are the
primary donor, and if Congress ap-
proves, we will continue to support the
economic development of the Microne-
sian states under the Compact of Free
Association.

Q. Vanuatu has recently estab-
lished full diplomatic relations with
Cuba. The Solomon Islands has
adopted a policy of looking to
Southeast Asia for partners in its
economic development. Western
Samoa has full diplomatic relations
with the People's Republic of China
and a significant cultural exchange
program. Kiribati is receiving some
material aid from the People's
Republic of China. Do you regard
these events as a trend that may cause
the United States to reassess its
Pacific islands policies?

A. As independent countries,
Vanuatu, the Solomon Islands, Western
Samoa, and Kiribati have the right to
choose their friends. We share a com-
munity of values and interests with the
islanders. We try to understand their ac-
tivities in light of our common interests.
We hope they take the same approach
with us.

August 1984

PACIFIC

Q. Some heads of state from South
Pacific nations have complained that
not enough attention is paid to them
in Washington. Is there still a residual
attitude in Washington that writes off
the islands because of their com-
paratively small populations?

A. Direct U.S. involvement in the
South Pacific was very limited until the
middle 1970s, since almost all of the
islands were colonial dependencies of
other states. Nevertheless, the United
States began responding to the changing
situation in the South Pacific more than
a decade ago. We initiated Peace Corps
programs, educational and cultural ex-
changes, and established consulates. As
more states became independent, we
upgraded the consulates to embassies
and accredited ambassadors. This proc-
ess is continuing. We are now consider-
ing additional diplomatic representation
in the area. These posts symbolize our
recognition of the importance of the
Pacific island nations. Also, recently, we
began a regional development assistance
program and stepped up our contribu-
tions to the work of the South Pacific
Commission.

I can assure you that the U.S.
Government is very conscious of the
island states and sensitive to their needs
and aspirations.

Q. Now that the Compact of Free
Association between the United States
and the Federated States of
Micronesia, Marshall Islands, and
Palau is close to completion, do you
foresee anything that could block ap-
proval of the compact in the U.S. Con-
gress or the United Nations?

A. Because the compact reflects the
will of the people, I hope that both the
U.S. Congress and the international
immunity will recognize that self-
government for the peoples of the Trust
Territory should not be delayed. I have
sent the compact to Congress with a
message urging its approval. We expect
close examination of the compact by the
Congress. The democratic process and
public review of the compact and im-
plementing the mandate of the Palauan
people. The primary issue has to do with

Free association is a partnership.
Under the compact, the United Suites
has responsibility for regional peace and
Palau would have
i. substantial ecom
assistance, and autonomy in foreign af-
fairs. This partnership requires the
United States to perform a security role.

■ ive asked the U.S. Con-
gress to approve the compact with the

Marshall Islands and the Federated
States of Micronesia at this time. I will
request congressional approval of the
compact with Palau only after that
government has confirmed that its inter-
nal constitutional approval process is
complete. We will cooperate with the
Palauan Government, but ultimately it is
an issue for the Palauans to decide.

Partnership requires resolution of
this issue. Last October the President of
Palau joined the Presidents of the
Federated States of Micronesia and the
Marshall Islands in signing the Saipan
accords, which call for prompt approval
of the compact by the U.S. Congress
and early termination of the trusteeship.

Q. Leaders in these islands — the
Federated States of Micronesia, the
Marshall Islands, and Palau — general-
ly give the United States high marks
for promoting democracy. However,
they have often criticized its effort in
promoting economic development. Is
your Administration addressing this
issue?

A. We are meeting that challenge
head-on. The United States supports the
operations and economic development of
these governments under UN trustee-
ship. A long-range capital improvement
program devoted to basic requirements
such as power, water, and sewage
systems, docks, roads, and airports, is
near completion. Looking to the future,
the Compact of Free Association pro-
vides substantial grants for government
operations, social services, capital im-
provements, economic development pro-
grams, health, education, telecom-
munications, energy self-sufficiency, and
other needs.

This assistance will enable the
Federated States of Micronesia, the
Marshall Islands, and Palau to work
toward the economic goals they have
established for themselves. I would like
to highlight the point that the elected
leaders of the Micronesians will establish
the economic policies under the compact.
This will put decisionmaking authority
and economic resources in the hands of
Micronesians and their leaders.

Q. How does your Administration
evaluate the prospects for economic
independence of these island nations
after the expiration of the U.S.
compact-related funding?

A. During the initial term of free
association, the Micronesians will have
the tools and resources to make signifi-
cant progress toward economic self-
sufficiency. Much will depend on the
priorities they establish and their ability
to exercise fiscal restraint. The compact

provides an opportunity for them to
move toward their goals and objectives.
Again, however, I want to stress the
important role of private business. A
free enterprise system offers opportuni-
ty and rewards initiative, imagination,
hard work, perseverance, and produc-
tivity. The governments of the Microne-
sian States will find that the private sec-
tor is the key to a promising future.

Q. Is it likely that the United
States will require more naval, air,
and ground force bases in the Pacific
islands in the future than it now has?

A. The short answer is no. However,
it is always wise to preserve our options.
The United States already has important
air and naval bases on Guam. They will
continue to be the principal U.S.
facilities in the central Pacific. In addi-
tion, we exercised our option for a long-
term lease of land in the Commonwealth
of the Northern Mariana Islands, which
will ensure added flexibility to meet any
change in our base and logistics re-
quirements. Although current plans are
to use the area only for training, we will
also have the option, under the compact,
for limited harbor, airfield, and training
sites in Palau. The only other defense in-
stallation in Micronesia is our testing
facility at Kwajalein. Use of this facility
is set by the compact for 15 years, with
an option for an additional 15 years. We
do not anticipate the need for any major
changes.

Q. A tremendous amount of atten-
tion has been given to the Federated
States of Micronesia, the Marshall
Islands, and Palau during the years of
negotiating the Compact of Free
Association with them. In the mean-
time, many people in the U.S. Pacific
territories of American Samoa, Guam,
and the Northern Marianas are com-
plaining that they are being over-
looked— not enough U.S. private
capital, not enough technical
assistance. Do you think these com-
plaints are justified?

A. I can understand why the
American territories view the negotia-
tions in Micronesia with great interest.
Guam has been a loyal part of the
American political family since 1898;
American Samoa since 1900. The people
of the Northern Marianas chose to
become Americans in 1975. The Com-
pact of Free Association has been
negotiated over the past 14 years. It is
an agreement that recognizes the
sovereignty of the people of Micronesia.

Although Americans in the ter-
ritories have watched these negotiations
with interest, I hope they share my

Department of State Bulletin

pride in their own permanent role in
America's future.

American Samoa, Guam, and the
Northern Marianas are part of the
American family. We have done much to
guarantee that their specific problems
receive special assistance. And we will
do more. We are working with the three
territories to diversify and expand their
economies, particularly with the help of
the private sector.

The territories do need more tech-
nical assistance and a major effort is
underway to establish long-range
technical assistance objectives for major
programs in each territory. Once the ob-
jectives are established, needed re-
sources will be better defined. During
the last 2 years, the U.S. Congress has
been supportive of increased technical
assistance programs, and I hope this
welcome trend continues.

But there still is not enough U.S.
private capital available to the ter-
ritories. We are exploring ways to make
financial capital more available and ac-
cessible. We are working closely with
the territories to identify and make
changes in Federal regulations and
legislation. That will promote economic
development.

The most important thing to
remember is that the people there are
our fellow U.S. citizens and nationals.
They enjoy great benefits and carry the
responsibilities of citizenship. They have,
and should have, the full resources of
the Federal Government available to
them. The challenge — and one I'm sure
we can assist — is to tailor those benefits
to their unique circumstances.

Q. The United States has not yet
signed the Law of the Sea Convention.
Why not? Is it possible that the
United States would sign it if it were
in any way amended?

A. When we announced that the
United States would not sign the con-
vention, I stated that the deep seabed
mining section did not meet U.S. objec-
tives. Our problems with the deep sea-
bed mining regime include:

• Provisions that would actually
deter future development of deep seabed
resources, when such development
should serve the interest of all countries;

• A decisionmaking process that
would not give the United States or
others a role that fairly reflects and pro-
tects their interests;

• Provisions that would allow
amendments without U.S. approval. This
is incompatible with our approach to
treaties;

• Stipulations relating to mandatory
transfer of private technology and the
possibility of national liberation
movements sharing in benefits; and

• The absence of assured access for
future qualified deep seabed miners to
promote the development of these
resources.

In spite of our well-known objections
and renewed negotiating efforts in early
1982, the Law of the Sea Conference
adopted the convention on April 30,
1982, although, after nearly 2 years, it
has not yet come into force. I would also
point out that many major industrialized
nations share our concerns. As to
amending the convention, at this point it
would be most difficult, and we are not
aware of any move to do so.

Nevertheless, the convention con-
tains many positive and significant ac-
complishments. We are prepared to ac-
cept and act in accordance with interna-
tional law as reflected in the Law of the
Sea Convention that relates to tradi-
tional uses of the ocean. We are willing
to respect the maritime claims of others,
including economic zones, that are con-
sistent with international law as
reflected in the convention, so long as
the international rights and freedoms of
the United States and others in such
areas are respected.

Q. The nuclear issue is a big one
in the Pacific. Could you clarify the
U.S. position on the testing of nuclear
weapons and on the dumping of
nuclear waste in the South Pacific?

A. The United States is sensitive to
the nuclear concerns of the island peo-
ple. We share the desire to protect the
ocean from pollution. The United States
is a party to the London dumping con-
vention and other international
agreements aimed at protecting the
health of the oceans. Our domestic laws
regulating ocean dumping are even more
stringent and are vigorously enforced.
The United States is also a member of
the Nuclear Test Ban Treaty, which
bans nuclear weapons tests in the at-
mosphere, in outer space, and under
water.

Q. The passage of U.S. Navy ships
that are nuclear powered and that are
capable of carrying nuclear weapons is
also of concern to the people of the
South Pacific. Can you clarify the U.S.
position in this regard?

A. U.S. nuclear-powered warships
have an unparalleled record of safe
operation since the first nuclear-powered
ship became operational in 1955. U.S.
nuclear-powered ships have accumulated

PACIFIC

over 2,700 reactor years of operation
without a single nuclear mishap. This
record reflects the very strict control ex-
ercised over the design, construction,
operation, maintenance, and repair of
our nuclear-powered ships and the
careful selection, training, and qualifica-
tion of the personnel manning the ships.

Over 40% of our navy's major ships
are nuclear powered, and they are
among our most effective ships. Access
to all areas of the oceans by U.S.
nuclear-powered warships is essential to
maintain the peace.

The ability of the United States to
deter aggression and to help maintain
peace throughout the world depends on
the ability of its ships and aircraft to
travel the ocean spaces, including the
South Pacific. The presence of the U.S.
Navy ships does not pose a danger to
the interests of the people of the South
Pacific; rather, it helps guarantee their
continued peace and freedom.

Q. You are a man from Califor-
nia— the Pacific State. What would
you like the Pacific people to
remember you and your Administra-
tion for having accomplished in the
Pacific?

A. As a Californian, I am particular-
ly aware of our Pacific interests. I would
like to have our Administration remem-
bered as one which fully recognized the
importance of Asia and the Pacific.
Focus is shifting increasingly to the
Pacific, which is now — as I said
earlier — the fastest growing economic
region of the world. We want to build on
the good relations we already have and
make them stronger. We want to do our
part to encourage regional cooperation.
And we want to continue our security
role, a role that permits the islands to
develop politically and economically ac-
cording to the wishes of the islanders
themselves.

Recently, meeting at the White
House with a group of Americans of
Asian and Pacific heritage, I had a
chance to reflect on the contributions to
American society that derive from the
people of this region. It's part of what
you might call "the spirit of America."
Back in the fall of 1980, I attended a
rally held in the shadow of the Statue of
Liberty. And there were many na-
tionalities and ethnic groups there, all
reminding us that we're all descendants
from immigrants who came here looking
for freedom and opportunity. And, while
our country had its flaws and we still
have them, the American dream was
real.

August 1984

REFUGEES

Asian and Pacific Americans have
helped preserve that dream by living up
to the bedrock values that make us a
good and a worthy people. I'm talking
about principles that begin with the
sacred worth of human life, religious
faith, community spirit, and the respon-
sibility of parents and schools to be
teachers of tolerance, hard work, fiscal
responsibility, cooperation, and love.

er all, it is values, not programs and
policies, that serve as our nation's com-
pass. They hold us on course. They point
the way to a promising future.

America needs its Asian and Pacific
American citizens. They've enriched our
national cultural and our heritage.
They've held the beliefs that account for
so much of our economic and social
progress. They've never stopped striving
for excellence, despite times in the past
when they experienced terrible dis-
crimination. We will continue to fight
against discrimination, wherever there
are any vestiges of it remaining, until
we've removed such bigotry from our
entire land.

And when we look toward that great
and grand Pacific Basin, there's a prom-
ising future. Americans may not hear
much about our Pacific and Asian
foreign policy, but then there's a lot of
good news that they don't seem to hear
about.

Our relations with our Pacific and
Asian friends and allies have never been
better. First of all, as I indicated in
answering your first question, it's not all
foreign policy. The United States of
America is part of the Pacific. There's
Hawaii, American Samoa, Guam, and
the soon-to-be commonwealth status of
the Northern Mariana Islands and our
special relationship with the Federated
States of Micronesia and the Republics
of the Marshall Islands and Palau. It is
my hope that our Administration will be
remembered as helping the people of the
Pacific Basin achieve their hopes and
aspirations, and that together, we will
bring a pacific, tranquil future to the
region.

Refugees: Overseas Aid
and Domestic Admissions

'Text from Weekly Compilation of
Presidential Documents <>f May 14. 1984.

by James N. Pureed, Jr.

Address before the seventh annual
National Legal Conference on Immigra-
tion and Refugee Policy convened by the
Center for Migration Studies in
Washington, D.C., on March 30, 1984.
Mr. Purcell is Director of the Bureau for
Refugee Programs.

The refugee crises of the second half of
the 1970s posed an immense challenge to
the international community and to the
United States in particular. The take-
over of the Indochinese countries by com-
munist regimes, the expulsion of
thousands of Cubans by the Castro
regime, the invasion of Afghanistan by
the Soviet Union, the Ogaden war in the
Horn of Africa, and the upheaval in Iran
all created large numbers of refugees.
The refugee crises we had to deal with as
a result of these events have been largely
overcome, and we are now faced with
situations where regional solutions to
refugee problems can be more aggressive-
ly explored.

Today I would like to talk about
refugee assistance versus admissions
because these are the basic alternatives
facing the international community and
the U.S. refugee program during the next
few years. The changing composition of
the refugee population in the world today
and U.S. policy decisions have brought
about a reduction in refugee admissions
to the United States. At the same time,
we are continuing to provide strong sup-
port for the assistance needs of refugees
through contributions to international
organizations and private voluntary
agencies.

We have also been actively encourag-
ing other traditional refugee-receiving
states to contribute more generously to
refugee assistance programs and to take
their fair share of the refugees who must
be resettled. A graphic illustration of the
shift in U.S. refugee programs from ad-
missions to assistance can be seen in the
change in the last few years in the level of
funding of these two functions. Four
years ago, two-thirds of the funding in
our appropriation was used for admis-
sions to the United States and only one-
third for assistance to refugees abroad.
Since then, the funding levels have been
basically reversed. Our FY 1985 budget
request calls for $196.3 million for
assistance and $117.3 million for admis-
sions programs.

Proposed Spending for
Refugee Assistance

Let's examine for a minute the
breakdown of our proposed spending for
refugee assistance in the current fiscal
year. The largest single item under this
heading is $67 million for assistance to
Palestinian refugees through the UN
Relief and Works Agency (UNRWA). The
approximately 2 million Palestinian
refugees in the Middle East registered
with UNRWA constitute the longest con-
tinuous refugee problem we have had to
deal with. Our assistance to this refugee
population supports U.S. efforts for peace
in the Middle East while answering a real
humanitarian need. Only a settlement of
the Arab-Israeli dispute appears likely to
finally resolve this refugee situation.

We are requesting $54.5 million for
assistance to refugees in Africa. The
African nations have historically provided
asylum to neighboring populations fleeing
civil strife and natural disasters. Here
again the primary requirement is for care
and maintenance assistance, not resettle-
ment in the United States. Together with
the UN High Commissioner for Refugees
(UNHCR) and the African nations
themselves, the United States is working
toward finding permanent solutions for
the refugee problems created by the
political and social conditions in Ethiopia,
Uganda, South Africa, and some of the
other countries of Africa. The upcoming
International Conference for Assistance
to Refugees in Africa (ICARA II), in
which the United States will participate,
will provide an opportunity to spotlight
the urgent assistance needs of the ap-
proximately 2 million refugees on that
continent.

Next on the list of assistance pro-
grams in terms of funding is the request
for $26 million to assist Afghan refugees
in Pakistan. Some 2.9 million Afghans
have registered with the Government of
Pakistan as refugees. U.S. assistance
funds are channeled through the UN
High Commissioner for Refugees, the In-
ternational Committee of the Red Cross
(ICRC), and a number of private volun-
tary agencies. In addition, the United
States will provide food aid to Afghan
refugees through the World Food Pro-
gram of the United Nations. The
generosity of the Pakistani Government
in providing asylum to the Afghan
refugees has greatly eased the burden on
the world community of this enormous

Department of State Bulletin

refugee population. Most of these
refugees are tribal agriculturalists who
are determined to return to Afghanistan
some day and, therefore, resettlement
outside the area is not generally desired.
Pending a settlement of the internal
political strife in Afghanistan and the
I withdrawal of Soviet forces from that
country, we must continue to provide a
relatively high level of assistance to the
Afghan population living in the Pakistani
borderlands.

Finally, we have requested $15 million
for assistance to refugees in Latin Ameri-
ca. Although the number of refugees is
small-approximately 150,000 according
to UNHCR estimates-the proximity of
the area to the United States and our
deep interest in developments in Central
America warrant a relatively high level of
assistance. In almost all cases, refugees
have been granted asylum by neighboring
states pending a resolution of the conflicts
in their home countries, and resettlement
outside the area has not been necessary.

Refugee Admissions

The regions which we have looked at so
far— the Middle East, Africa, South Asia,
and Latin America— contain the vast bulk
of the world's refugees, approximately 7.3
million out of a total refugee population of
7.7 million in the world today. As I have
noted, in these regions, and for all but a
few of these refugees, assistance through
international organizations and private
voluntary agencies is the proper role for
the United States to play. Where then
does admissions fit into the picture of
U.S. refugee policy?

For FY 1985, the Department of
State will request a worldwide ceiling of
72,000 for the resettlement of refugees in
the United States. This is the same ceil-
ing we requested in FY 1984. And as in
FY 1984, 50,000 of these numbers are in-
tended for refugees from East Asia, with
22,000 for refugees from the other
geographic areas. We are continuing to
work closely with the governments of the
first-asylum countries in Southeast Asia
in the international effort to resettle
those refugees who require resettlement.
Combined with the admissions oppor-
tunities provided by other major resettle-
ment countries such as France, Australia,
and Canada, this level of U.S. admissions
should greatly reduce the first-asylum
burden on the countries of Southeast
Asia, which have acted as hosts to
thousands of refugees from Indochina. In
addition, I believe that the 22,000 remain-
ing numbers will provide adequately for
those refugees from other regions who re-
quire resettlement in the United States.

August 1984

The proposed ceilings for those regions
are: Near East and South Asia— 6,000;
Eastern Europe and the Soviet
Union- 12,000; Africa-3,000; and Latin
America and the Caribbean— 1,000.
My purpose in throwing these
statistics at you has been to demonstrate
that the magnitude of the refugee reset-
tlement problem is not as great as you
might think. Indeed, only some 5% of
those migrating to the United States
every year are legal refugees; the re-
mainder are immigrants and illegal
migrants. While the number of refugees
needing assistance remains great, those
requiring resettlement in countries far
from their native lands has been steadily
reduced. I want to stress that this situa-
tion is "normal" in that it reflects the
overcoming of a series of emergencies
which hit the United States and other
resettlement countries in the 1970s. We
are not "closing the doors" to refugees.
We are reacting for the most part to the
changing nature of the refugee problem in
the world and, in particular, to the
diminished flow of refugees from In-
dochina. In this current period, the ap-
propriate response is more often assist-
ance than admissions.

Problem Areas

While the world refugee situation has
stabilized, two problem areas remain
which I would like to address:

First, the need to afford better pro-
tection to those refugees who have not
yet found safety and security; and

Second, the need to bring under
greater control the crisis which has ex-
isted in Southeast Asia since 1975.

The UN High Commissioner for
Refugees issued a report in August 1983
calling the international community's at-
tention to the urgent need to provide bet-
ter protection to persons fleeing from op-
pression. The High Commissioner's
"Note on International Protection"
pointed out that not only were countries
taking a more restrictive position on legal
protection, but in some instances the
physical protection situation of refugees
had also worsened.

The provision of legal protection to
refugees has been complicated by the
debate over whether many asylum
seekers are, in fact, "economic migrants"
who have no fears of persecution in their
countries of origin. Indicative of the
hardening attitude toward granting
asylum is the new Swiss law on asylum
due to take effect on April 1. This law, a
revision of the liberal 1981 asylum
statute, will deny work permits to asylum

REFUGEES

applicants and will allow only a single ap-
peal in cases where asylum is refused.
Previously, asylum applicants were
granted permission to work while their
cases were pending and could file two ap-
peals. Asylum applications which the
authorities consider groundless can be
denied without granting the applicant a
personal interview.

It is ironic that in Switzerland, the
headquarters country of the UN High
Commissioner for Refugees, the govern-
ment should be taking measures to
reduce the number of persons granted
asylum. I mention the Swiss case only as
an illustration of a wider phenomenon
among the economically hard-pressed
developed countries. We can hardly be
smug about this issue. Here in the United
States we, too, are faced with increasing-
ly difficult decisions about who should be
granted asylum. There is no easy answer
to this dilemma.

While the legal protection question is
troublesome, the physical protection prob-
lem is truly alarming. The savage pirate
attacks on boat people in the waters south
of Vietnam and the armed attacks on
refugee camps on the Thai-Kampuchean
border and in Lebanon are the most
dramatic examples of the physical protec-
tion problem. Together with the UNHCR
and the other donor nations, we are work-
ing with Thailand to find ways in which
the antipiracy campaign in the Gulf of
Thailand can be made more effective.
During 1983 the UNHCR estimates that
40% of the boats carrying escapees from
Vietnam were attacked by pirates. The
figures of the number of people killed,
raped, and left to die at sea are truly hor-
rifying. It is imperative that a vigorous
antipiracy program stop this mayhem as
soon as possible.

A related area in which greater ef-
forts at physical protection are needed is
the rescue at sea of boat people. UNHCR
figures show that, in 1980, 20% of all Viet-
namese refugees arriving in Southeast
Asian refugee camps had been picked up
by ships traversing the South China Sea.
In 1983 this figure had dropped to 12%.
Various reasons have been advanced to
account for this decline, but it is clear
that to a great extent boat people are be-
ing passed up because ship captains fear
they will not be able to disembark the
refugees at the next port of call and will
be forced to incur considerable expense
for their upkeep until some country
agrees to accept them. Here again,
together with UNHCR, the United
States is actively engaged in educating
shipping organizations and ships' masters
about the procedure for handling persons
embarked at sea. For this procedure to

SCIENCE & TECHNOLOGY

work, however, there must be ready
resettlement offers for such people. Un-
fortunately, the number of such resettle-
ment offers has decreased.

The other area of concern which I
>ned is how to gain greater control
over the international resettlement effort
for Indochinese refugees. Here, also, we
are faced with some difficult protection
issues. Countries of first asylum in
Southeast Asia have reacted to many of
the more recent arrivals from Indochina
by instituting, in some instances, a policy
of "humane deterrence." The use of
closed camps— in which persons are not
permitted to have contact with the
UNHCR and in which "austere" living
conditions are imposed in order to
discourage additional migrants— poses
quest ions which concern us all.

We in the U.S. refugee program are
faced with the question of how to deal
with the so-called "Priority Six" refugees
from Indochina— those who have no
identifiable ties to the United States but
who satisfy the definition of a refugee
under U.S. law. Do we agree to accept
such people for resettlement in the
United States? If so, can we be assured
that other countries will take their fan-
share of the refugees remaining in coun-
tries of first asylum? I believe that
through a policy of discouraging addi-
tional clandestine flight from Vietnam by
expanding the UNHCR's Orderly Depar-
ture Program and through continued in-
ternational cooperation in resettling the
remaining refugees in first asylum, the
Indochinese refugee problem can be
largely contained in the next few years.

I'.S. Dedication to Safeguarding
Refugee Interests

Despite these troublesome issues of pro-
tection and resettlement, I think we can
look with some satisfaction on the current
state of the U.S. refugee program. We
have responded generously to appeals for
assistance to refugees in Africa, the Mid-
dle East, South Asia, and Latin America.
We are wo king with the UNHCR and
other resettlement countries to expand
the Orderly Departure Program from
Vietnam, which hopefully will provide a
safe means of exit from that country and
thereby end the phenomenon of the boat
people, with all its attendant problems,
particularly the scourge of pirate attacks.
I am certain that as we move into the
1980s the United States will continue to
provide leadership to the international
community in safeguarding the interests
of refugees. Although the mix between
admissions and assistance may change,
this will in no way signal a slackening of
our dedication to this vitally important
task. ■

East-West Relations
and Technology Transfer

by William Schneider, Jr.

Address delivered by Michael B.
Marks, Senior Policy Adviser for Under
Secretary for Security Assistance,
Science, and Technology Schneider before
the Federal Bar Association in Newton,
Mass., on March 29, 1984.

My remarks will be directed primar-
ily at the nature and setting of U.S.
policy, as well as a brief description of our
activities at the Coordinating Committee
for Multilateral Security Controls
(COCOM). Many of you will recall, as I do,
the euphoric days of the early 1970s— the
heyday of detente in East- West relations.
The Soviet Union and the United States
had just signed a strategic arms limitation
agreement, perceived at the time as an
important milestone in limiting arms ex-
penditures and as the prime indicator of
relaxation of Soviet-American tensions.
President Nixon and Premier Brezhnev
exchanged visits and signed numerous
agreements. Our allies joined in to create
a widespread spirit of East-West detente.

Economic relations, naturally, played
a major part in the new atmosphere. The
West liberalized its credit terms, and the
Soviets took advantage of this liberaliza-
tion to increase their purchases of strat-
egic technology and equipment that they
either could not make or could make only
with radical shifts in existing patterns of
resource allocation, such as truck assem-
bly lines, entire chemical plants, and innu-
merable pieces of capital equipment.

The theory underlying detente was
that a web of economic, scientific, cul-
tural, and political relationships would so
interlink Soviet and Western societies
that their views on security and other
core issues would tend to converge. It
was believed that the tangible benefits
flowing from economic and other inter-
changes would encourage Soviet restraint
in foreign policy. In a word, it was be-
lieved that our two societies would
become "interdependent," thereby
diminishing the possibility of any serious
conflict.

These hopeful views of East-West
relations regrettably were not fulfilled.
The Soviets, in the late 1970s and after,
failed to live up to the hopes of a decade
earlier. Their sponsorship of Cuban
adventures in Africa, their continuing ac-
tivities in Indochina, their invasion of
Afghanistan, their crackdown in Poland,

and their involvement in Central America
were visible indications that their fun-
damental values and policies had not been
changed by a more lenient, friendly, and
cooperative attitude on the part of the
West. Most recently, we have seen
another brutal reaffirmation of Soviet
values— the Korean Air Lines tragedy—
which has cost 169 innocent lives.

Underlying these aggressive acts, of
course, is the massive and unrelenting
Soviet military buildup that went far
beyond any reasonable notion of what
would be needed to defend the U.S.S.R.
In retrospect, it is clear the Soviet Union
used detente as a tactical device to slow
the modernization of U.S. forces and lull
the West into a false sense of security
while they carried on the largest,
costliest, and most threatening military
buildup in history.

Soviet Efforts to Acquire
Advanced Western Technology

As we slowly disabused ourselves of the
belief that we and the Soviets shared a
common objective, we became increasing-
ly critical of the ease with which the
Soviets could obtain advanced Western
technology. We increased and focused our
information gathering and analysis to try
to determine what technology the Soviets
were getting and what the military im-
pact might be. The results were dismay-
ing. Evidence grew that Western tech-
nology was the target of a massive, well-
coordinated Soviet acquisition effort, or-
chestrated through legal and illegal
methods and aimed at those technologies
which promised the highest military
payoff.

Make no mistake— U.S. companies
and equipment are a prime target of the
largest intelligence organization on earth.
They are determined, well financed, and
increasing their efforts. There is no end in
sight for the struggle which this forces
upon us. This struggle is complicated by
the fact that industry is overwhelmingly
in the civil, rather than the military, do-
main. As a consequence, the ability of the
Federal Government to directly control
the dissemination of this technology to
the Soviet Union is a vastly more difficult
task than controlling the critical technolo-
gy of a generation ago— nuclear
weapons— which was entirely in the
military domain.

Department of State Bulletin

SCIENCE & TECHNOLOGY

The Soviet acquisition effort is
planned and approved at the highest
governmental and party levels. Much of
the Soviet acquisition of Western equip-
ment, know-how, and training applicable
to the military has been through entirely
legal and open means, such as commercial
sales, business and research seminars and
symposiums, commercial visits, and
academic exchange programs. This effort
is complemented by the extensive and
growing use of Soviet and East European
intelligence services through a variety of
clandestine and illegal means.

Continued problems in Soviet domes-
tic technological capabilities— due in part
to the Soviet system itself, which tends to
discourage innovation— strongly suggest
they are not likely to decrease their
dependency on Western equipment, tech-
nology, and know-how.

Soviet acquisition efforts have become
more systematic and effective over the
past 15 years and a number of trends
have become clear.

• Weapon-related acquisitions in-
creasingly are more selective, focusing on
critical components and materials neces-
sary to achieve greater performance.

• Greater emphasis is being placed on
acquiring Western production technology
and equipment, as opposed to end prod-
ucts. This reflects the Soviet need to
become self-sufficient and to increase the
efficiency of large-volume production.
Much of this technology and equipment is
subject to export controls, and its acquisi-
tion often is accomplished through intelli-
gence-directed trade diversions.

• Increasing priority is being given to
dual-use commercial technologies and
emerging high technologies, perhaps in-
dicating the military value placed on them
by the Soviet Union, as well as their
greater vulnerability to intelligence ac-
quisition methods.

• Acquisitions of U.S. technology are
being stepped up beyond U.S. borders.

• The role of East European intel-
ligence services has increased steadily
since Western sanctions against the
Soviet Union were initiated following
Afghanistan and Poland.

We believe these acquisitions have
benefited the Soviet Union by increasing
the pace of Soviet weapons systems de-
velopment; reducing military research-
and-development costs and risks; ex-
pediting the development of effective
countermeasures against Western
military systems; and modernizing and
expanding critical sectors of the Warsaw
Pact defense industry and support base.
These payoffs are very critical to the
Soviets, who continue to forge ahead with

August 1984

their military buildup, despite a dete-
riorating economic growth rate.

The qualitative advances made by the
Soviet military by means of acquiring
Western technology increase the burden
that we and our NATO allies must share
in maintaining qualitative superiority
over the Warsaw Pact.

The Reagan Administration has given
top priority to fighting this massive
Soviet effort at increasing its military
power with the fruits of Western tech-
nology. However, a great deal of damage
has already been done that has saved the
Soviet Union millions of dollars in
research-and-development costs and has
cost the West billions of dollars in forcing
an accelerated pace of arms moderni-
zation.

The U.S. Response

The U.S. Government has had to ask
itself a number of important questions in
facing this problem. How shall we meet
this challenge? What priority should it
receive, among the many threats to our
interests? What should we expect of our
allies, who are increasingly capable of pro-
ducing the technologies of concern? What
should our private sector do?

This Administration has sharply in-
creased the priority and the resources
assigned to this problem. We intend to-
sustain and increase our efforts to
minimize the acquisition of militarily
useful technology by our potential adver-
saries. As the problem is a long-term one,
rooted in Soviet ambition and weakness,
it is essential that our response
be sustained.

One way, I believe, has been through
the creation of an interagency organiza-
tion that has assumed great importance in
the Administration's efforts to stem the
flow of strategic technology to our adver-
saries—the Senior Interagency Group on
the Transfer of Strategic Technology.
Since its advent in the summer of 1982,
several exciting developments have taken
place. It was created to bring all U.S.
Government agencies with strategic
technology programs or interests
together at a policymaking level for the
purpose of coordinating the many facets
of the government's technology transfer
activities. Eighteen agencies or offices are
members.

Prior to the formation of the group,
there was already a healthy amount of ac-
tivity within the executive branch on the
issue. The problem was that there was no
day-to-day focal point for organizational
coherence and the setting of priorities. It
was this very lack of a coordinating
center that stultified the last year of the

Carter Administration when policies,
principally after Afghanistan, began to
turn in the direction advocated then and
pursued now by this Administration.

The Senior Interagency Group had,
and still has, several key objectives. They
are:

• To raise the level of attention to
these issues within all relevant U.S.
Government agencies;

• To take an overall view of the issue
and to seek priorities accordingly;

• To initiate new projects where
necessary and to see that implementation
and followup occur in all U.S. initiatives;

• To make policy decisions whenever
necessary; and

• To coordinate the activities of all
relevant U.S. Government agencies as
previously described.

Let me review with you now some of
the substantive work of the group over
the last year.

Under presidential tasking, the group
is committed to execute U.S. policy in
strengthening COCOM, to negotiate
multilaterally to seek strategic trade con-
trols on oil and gas technologies, and to
draft a comprehensive U.S. technology
transfer policy for presidential deci-
sion—now in its formal stages of comple-
tion.

The Senior Interagency Group has set
in motion numerous projects on its own
initiative. We have opened major bilateral
dialogues with our key high-technology
allies, seeking enhanced government
awareness of the technology transfer
issue and a strengthening of their na-
tional control systems. We are more than
satisfied with the results of our initial
steps. You can be assured that our efforts
will continue unabated.

Yet another project of the group has
been the raising of intelligence priorities
within allied intelligence agencies. We
have had consultations with at least 12
countries so far. They began looking at
what they had largely ignored before and
did not like what they saw. Of the approx-
imately 80 expulsions or arrests of Soviet
intelligence officers in 1983 in the in-
dustrial democracies, we believe more
than half were involved in strategic
technology collection.

In taking the overview of the strat-
egic transfer issue, we discovered early
on that there were some problems in our
own system of protection and control.
One response was to strengthen the visa
mechanism. It was clear that there is a
group of people entering the United
States every year with the intent of ac-
quiring controlled U.S. technology illegal-
ly, and yet it was unclear what the gov-

SCIENCE & TECHNOLOGY

eminent could do. We put the issue under
intensive study in 1982-83. In April we
reached the conclusion of this process,
adopting a new policy of denying and
restricting visas when we have evidence
that this is justified.

Another of our efforts has been to
enhance U.S. public awareness of the
transfer problem. This is what today's
appearance by myself and my colleagues
is all about. We have been actively pursu-
ing this goal through opportunities
presented by public speaking invitations,
media appearances, and dissemination of
unclassified government reports. A more
specific aspect of this program is to brief
industrial, commercial, and research-and-
development institutions that we believe
mr.y be high on the Soviet priority list. I
am happy to report we have had a
generally positive response to our presen-
tation of the problem to defense contrac-
tors, civilian firms, trade associations, and
even the universities. A great deal has
been accomplished in this area and efforts
are even now being intensified. One of
our next steps will be to press friendly
governments to follow our example with
awareness programs of their own.

Coordination of Export Controls
Through COCOM

As you know, the role of our allies is also
vital to our success. The organization
through which we work to coordinate
U.S. and allied export controls is
COCOM. COCOM has been in existence
since the late 1940s when the United
States realized it was essential to achieve
a fundamental agreement among the ma-
jor Western industrial powers concerning
their trade in militarily relevant tech-
nology to the Soviet bloc. The importance
of this organization has increased over
the years since the United States has had
less and less of a monopoly in the ad-
vanced sensitive technologies of military
importance. We need the active coopera-
tion of our allies if our own national
security controls are to be effective.
Before going on to our efforts to
strengthen COCOM, let me first provide
a quick thumbnail sketch of this organiza-
tion,

COCOM 's present membership com-
prises all of the NATO members except
aid and Spain, plus Japan. It was
iied by informal agreement of its
members and has no formal treaty or ex-

The meni
therefore, have no legal obligation to par-
ticipate in COCOM or to abide by the
commitments made there. However,
there have been relatively few insl
when a member nation has exercised its

sovereign right to deviate from decisions
reached in COCOM. This may be in part
because all important COCOM decisions
are made on the basis of unanimity.

Traditionally, COCOM has had three
major functions:

The First is the establishment and up-
dating of the three lists of embargoed
products and technologies— the munitions
list, the atomic energy list, and the inter-
national list which covers dual-use items
with both civil and military applications.
Although the COCOM lists are not
published, they become the basis for the
national control lists administered by
member governments. The lists are
revised— i.e., strengthened, liberalized, or
clarified— when proposals submitted by
member governments obtain unanimous
support. Most revisions are made in the
context of the list reviews, exercises in-
volving more than a year of technical
negotiations held every 3 or 4 years.

Second, COCOM acts as the clear-
inghouse for requests submitted by
member governments to ship specific em-
bargoed items to specified end users in
the proscribed countries. (The COCOM-
proscribed countries are the Soviet
Union, the other Warsaw Pact countries,
Albania, and the communist countries in
South Asia.)

Third, COCOM serves as a means of
coordinating the administration and en-
forcement activities of the member
governments, largely through its Export
Control Subcommittee, which in recent
years has met on an annual or semiannual
basis.

In brief, COCOM has been reasonably
effective over the years in coordinating
national export control policies and
restrictions. Without COCOM, competi-
tion among Western exporters would
have escalated so that even more high-
technology sales to the Soviet Union and
other communist countries would have
taken place.

On the other hand, the Soviet Union
and the Warsaw Pact have obtained
equipment and technology of military
significance from the United States and
the other COCOM countries either
through violations of controls or because
such items have not been controlled. It
was apparent that we needed to gain in-
creased support from our COCOM allies
for expanding the embargo lists to cover
sensitive technologies not under control
and for significantly upgrading their ex-
port licensing and enforcement activities.
President Reagan's initiative on sen-
sitive technology transfer at the Ottawa
summit underscored our commitment to
improving and strengthening COCOM. It

resulted in a high-level COCOM meeting
in January 1982, the first ministerial-level
meeting of the organization since the late
1950s. Since that time, we have been
working with our allies to implement the
decisions of that meeting. Our efforts
were given a healthy "shot in the arm"
last fall when we reached a consensus
agreement with our major allies to under-
take a broad review of East- West eco-
nomic relations with an eye to assuring
that such relations are in line with the
security interests of the West. COCOM
has been an important part of this review.

Last spring I led a senior-level inter-
agency delegation to the second high-level
meeting which was held in Paris in late
April. I am glad to report that our
COCOM allies are more committed to
working with us on strengthening the
multilateral system of export controls
in some very concrete ways.

In October 1982 the United States
submitted more than 100 technical pro-
posals for consideration in the 1982-83 list
review. Most of these were aimed at
expanding and strengthening the existing
COCOM embargo lists. Some were
directed at releasing from the list those
obsolescent technologies which were real-
ly no longer of concern. These negotia-
tions will hopefully wind up this spring.
We have already obtained COCOM agree-
ment on a number of high-priority U.S.
proposals for new or expanded controls.
COCOM has no enforcement powers
of its own and must depend on the na-
tional enforcement activities of the 15
member governments. At the U.S. ini-
tiative, the first high-level meeting en-
dorsed the need to strengthen the na-
tional enforcement activities and also
called for a harmonization of national
licensing practices. A subsequent meeting
of the COCOM Export Control Subcom-
mittee in May 1983 adopted a large
number of recommendations drawn from
U.S. initiatives which, if implemented,
could result in broad improvement in both
of these areas. One of the most important
of these recommendations deals with the
need to devote adequate resources to ex-
port control monitoring and enforcement
activities.

Before leaving COCOM, I would like
to mention one other U.S. COCOM initia-
tive which grew out of the La Sapiniere
consensus agreement with our allies on
East-West economic relations. The allies
agreed that COCOM not only would
undertake efforts to strengthen its ex-
isting activities but also would undertake
a study of "other high technology, includ-
ing oiland gas" whch might have security
implications for the West.

Department of State Bulletin

SCIENCE & TECHNOLOGY

At the risk of telling you more than
you really wanted to know about
COCOM, I hope this overview has given
you a better idea of how we deal with
COCOM and the problem of foreign avail-
ability of technology.

Cooperation With the Private Sector

A final way to sustain our response to the
Soviet threat is through our continuing
ooperation with our own technical and
ousiness communities, for the private sec-
tor is at once the source of creativity and
the engine of our society. With your good
will and support, we will be able to man-
age our own technology losses and bring
increasing pressure on our allies to con-
brm their export policies to ours.
Without your participation, we will enter
a world where all compete to increase
.heir own insecurity. We will, to para-

phrase Lenin's chilling prophecy, sell the
rope to hang ourselves.

Conclusion

In closing, a society such as ours, which
values individual freedom and private ini-
tiative, is bound to suffer some disadvan-
tage when confronted with an attempt to
utilize our openness, our lack of secrecy,
and the military utility of our commercial
technologies against us. But we also have
certain strengths, which, in my view,
more than outweigh these disadvan-
tages—our technical creativity, the speed
and breadth of our technical advances,
and, most of all, the spirit of responsibili-
ty with which our private citizens have
always responded to challenges. I have no
doubt that we shall meet this challenge as
we have met all others, for the future
belongs to the free. ■

The Role of Science and Technology
n Foreign Affairs

ty James L. Malone

Address before the Council of Scien-
tific Society Presidents on April 25,
'984. Ambassador Malone is Assistant
'ecretary for Oceans and International
Environmental and Scientific Affairs.

I am honored to have this opportunity to
speak to this distinguished gathering to-
day and to discuss with you the ever-
growing role of science and technology
in our country's foreign affairs. As you
will have gathered from my title, the
oureau I head within the State Depart-
ment is concerned with a wide range of
scientific and science-related activities.
Actually, there is more than the bureau's
name implies. In addition to oceans and
international environmental and scien-
tific affairs, we are also concerned with
health, natural resources, nuclear energy
and energy technology, polar and
fisheries affairs, and population matters.

Now, when Thomas Jefferson was
Secretary of State, he didn't need a lot
of assistance on matters such as these.
He knew about as much as anyone did
about them, and they didn't impinge
very much on his work or that of his
few assistants. Since then, however, and
particularly since the end of World War
II, things have grown much more com-
plex, and what started as a small office
a few decades ago has evolved into
what, in State Department terms, is a

August 1984

relatively large bureau. I can assure you
it is not too large, however. With
responsibilities ranging from cooperation
in space to the effluent from Tijuana's
sewers, and from the division of the fish
catch off our coasts to efforts to prevent
nuclear proliferation, we are never
underemployed.

International scientific cooperation,
an area in which I know many of you
are involved, is a particularly important
responsibility. It was not, of course, in-
vented by the Department of State.
American scientists, even before the
creation of the Republic, were engaged
in fruitful collaboration with their col-
leagues in other countries. Benjamin
Franklin, who was one of our first diplo-
mats, was also one of our first interna-
tionally recognized scientists. Mutually
beneficial cooperation goes on today in
thousands of areas of scientific endeavor
both on an academic and a commercial
level, with little reference to the U.S.
Government.

I do not mean to suggest, however,
that the government is inactive in this
vitally important sphere of activity.
Nothing could be further from the truth.
We play a major role as a catalyst and,
quite often, material supporter of both
bilateral and multilateral international
scientific cooperation. In doing all this,
the Federal Government has a par-
ticularly important responsibility in see-
ing to it that international scientific and

technological cooperation serves the
overall strategic and foreign policy in-
terests of the United States.

The magnitude and diversity of
America's research and development ac-
tivities make cooperation with the
United States in science and technology
at the individual, institutional, and
governmental levels extremely attrac-
tive, and often imperative, to scientists
of other nations. Conversely, American
scientists and engineers reap substantial
benefits from such cooperation. Often
they gain access to new or superior
scientific instrumentation or to unique
geographical settings and phenomena. In
addition, their human and financial
resources are augmented through inter-
national cooperation. American scien-
tists are able to benefit from the unpub-
lished data developed by their colleagues
in other countries and to use facilities
which would cost a great deal of money
to reproduce in the United States.
Naturally, foreign scientists realize
similar benefits from their cooperation
with the United States. It would be im-
possible to draw up a balance sheet of
these benefits. Obviously, all of mankind
gains, and we know that the United
States would be poorer and our rate of
scientific and technological advance
much slower were such mutually bene-
ficial collaboration not taking place.

Bilateral Cooperation

President Reagan has given considerable
attention to our programs of bilateral
scientific cooperation, with particular
emphasis on selected countries. Among
the most important are Brazil, China,
India, Israel, and Japan. He has taken
these initiatives both because the scien-
tific capabilities of these countries are
sufficiently advanced in some areas so
as to permit fruitful cooperation and be-
cause such cooperation promotes more
general American foreign policy objec-
tives.

Brazil. Science and technology
played an important role in the Presi-
dent's December 1982 trip to Brazil and,
as a result, a working group on science
and technology was established by the
Brazilian Ministry of Foreign Affairs
and the Department of State. The initial
objective of this body was to renew the
intergovernmental science and tech-
nology agreement between the two
countries. To advance these efforts, the
National Science Foundation organized a
conference on American-Brazilian
private sector cooperation in science and
technology last spring to explore ways

SCIENCE & TECHNOLOGY

in which a new intergovernmental ag
ment could be used to advance industrial
productivity in the two nations. A new
cooperat i :e and technology

agreement, which I was privileged to
neg as concluded in February of

this year and signed by Secretary of
State Shultz. Brazil is a nation of vir-
unlimited potential that is, even
with its current financial problems,
evolving rapidly both economically and
politically. We wish, of course, to assist
it in this evolution, and, in doing so,
scientific cooperation is playing a signifi-
cant role.

China. Scientific cooperation with
China is conducted under an umbrella
agreement which was signed in 1979.
Since that time. Sino-Ameriean scientific
cooperation has grown to become our
largest bilateral program and we have
i oncluded technical protocols on
cooperation in 21 fields. A joint commis-
sion directs and coordinates the overall
program. The Chinese attach great
importance to this area of cooperation
with the United States as, indeed, do we
to our cooperation with them. And it
will be one of the subjects discussed dur-
ing the President's visit to China which
starts tomorrow. I do not need to
emphasize to this group the importance
of our relations with China, the world's
most populous nation and one occupying
a pivotal strategic position. In any case,
the President's trip makes the point
more eloquently than could any words of
mine. I am pleased to underline, how-
ever, the very significant role that scien-
tific cooperation is playing in strength-
ening our relationship.

India. Scientific cooperation with In-
dia was given special emphasis during
Prime Minister Gandhi's July 1982 visit
to Washington. At the close of her stay,
Mrs. Gandhi and President Reagan an-
nounced the formation of a senior scien-
tific panel to formulate plans for intense
Red joint research efforts. This panel
has been carrying out its mandate, and I
believe its activities will bring about an
'vement in our scientific coopera-
tion. We have also just begun negotia-
tions with the Indians to use a portion of
our dwindling supply of special foi
currency rupees to establish an end
be able to continue to
finano

funds would otherwise have been
hausted. A I am sure you are aware.
Indo-American relatioi

At the same tune t . ,lU.

i»K ;led

to ;, reservoir of good will toward

es, which is of great assist-
ance to Prime Minister Gandhi and
President Reagan in their efforts to im-
prove these relations.

Soviet Union. Scientific and techno-
.il exchanges between the United
States and the Soviet Union are, of
course, an area of particular concern to
all of us. The history of these exchanges
essentially falls into three distinct
periods. The first, from 1954 to 1972,
saw a steady increase in the volume of
exchanges and in expansion of research
topics. The second period, from 1972 to
1979, was characterized by the establish-
ment of 1 1 bilateral agreements. They
provided more direction and purpose to
the exchanges. During the third
period — which began in 1980 and con-
tinues to the present — because of Soviet
intervention in Afghanistan and events
in Poland, exchanges were sharply cur-
tailed. At present, they are operating at
very limited levels. It is, of course, our
hope that over time this situation will
change and the Soviet Union's conduct
will be such that we will be able to
return to a higher level of cooperation.
There are many areas of science, outside
those having military applications,
where cooperation between us can pro-
duce significant benefits.

International Cooperation

One area of important international
cooperation, multilateral as well as
bilateral, has been space science.
Important civil space projects include
the solar maximum mission, the interna-
tional solar polar mission, the space tele-
scope, the infrared astronomical
satellite, and the Galileo Jupiter orbiter
and probe. Many friendly foreign coun-
tries have played a significant role in the
space shuttle program, and we look for-
ward to their participation in the perma-
nent manned space station announced by
the President in his State of the Union
address in January.

One indication of the increasing im-
portance of science and technology in in-
ternational affairs is the fact that
cooperation in these areas was a major
subject of discussion at both the Ver-
sailles and Williamsburg economic sum-
mits. The governments participating in
the summit meetings are continuing
their examinations of possibilities of im-
proving their cooperation in many fields,
and we can expect science and tech-
■ continue to be a subject of
discussion whenever the leaders of the
world's major industrial nations gather

t her.

State Department's Role

I would like to comment briefly about
the Department of State's role in inter-
national scientific and technological
cooperation. We have a coordinating
role assigned to us by Congress in
Title V of the 1978 Foreign Relations
Authorization Act, and, in conformity
with the President's directions, we at-
tempt to see to it that such cooperation
serves the United States' overall in-
terests. The Department's role is
necessarily limited, however, and we
normally do not become involved direct-
ly in the management of scientific pro-
grams. The direction, amount, and
nature of cooperation must, in the first
instance, be decided upon by the Ameri-
can scientific agencies or institutions
directly involved. The project must make
sense to them in terms of their in-
terests, priorities, and funding con-
straints. Our role is to ensure that such
cooperation serves our vital national in-
terests. Where it does, we encourage
such cooperation.

One of the tasks that I take most
seriously among the duties assigned to
me in my present position in the Depart-
ment of State is seeing to it that scien-
tific and technological considerations be-
come an integral part of our foreign af-
fairs decisionmaking. In part, this effort
involves keeping my senior colleagues
and the Secretary aware of these con-
siderations. More importantly, perhaps,
it also involves building a greater
awareness of science and technology
throughout the Foreign Service and the
Department.

In carrying out this effort, we are
addressing ourselves to two groups
within the Foreign Service. The first is
that relatively small body of officers whe
specialize in scientific and technological
affairs. They, for the most part, serve in
the 25 or so science counselor and at-
tache positions we have in our Em-
bassies abroad. Many are trained scien-
tists but others are Foreign Service of-
ficers with a more traditional foreign af-
fairs background who have decided to
specialize in the scientific area. Given
their varied backgrounds, the training
we give them must also vary. Basically,
we try to turn the scientists into better
diplomats by giving them appropriate
language and area training, and the
diplomats into scientifically aware of-
ficers by exposure to scientific institu-
tions, seminars, and on-the-job ex-
perience. I am striving, too, to make the
scientific specialty a more attractive
career path within the Foreign Service.
Unfortunately, this is not the present

Department of State Bulletii

UNITED NATIONS

>erception. Most officers, both non-
:areer and career, still regard science
ind technology as ancillary to the con-
iuct of foreign affairs and not as an
essential part of our bilateral and multi-
ateral relations.

This is why, in my view, the greater
ind more important task for me may be
hat concerned with the second group of
foreign Service officers, that is, all
hose who are not science specialists.
They are involved in political, consular,
;conomic, and administrative work,
;hough some also have science-related
luties in the great majority of overseas
}osts which do not have full-time science
>fficers. It is no easy task addressing
,hese officers. They are spread all over
;he world, as well as in Washington, and
nvolved in time-consuming jobs. One
,ool we have developed is a series of
seminars on specific topics at our
.'oreign Service Institute. Another,
which gives promise of long-term
•esults, is an elective scientific affairs
Deriod in the 6-month training course
which is now being required of all mid-
evel officers. We are also organizing
•egional conferences of full-time science
>fficers and others with part-time re-
sponsibilities so as to make both
groups— but particularly the latter—
We aware of current issues and events
n the area of international science and
;echnology. In all this we are not trying
;o create scientists— or even what I
would call scientific bureaucrats— but
Foreign Service officers who are aware
)f the importance of science and tech-
lology in relations between nations.

One example of this increased
mportance is the related areas of tech-
lology transfer, intellectual property
-ights, and patents. These questions are
imong the most vexing and complex fac-
ing our diplomats in many countries to-
day. They arise all the time, for in-
stance, in our relations with China. You
simply can't talk about them and under-
stand the issues involved without a sig-
nificant level of scientific literacy. The
same is true of environmental issues,
such as the acid rain controversy with
Canada and the area of civil nuclear af-
fairs. These are difficult and demanding
issues today, and we can expect that
they, and others like them, will become
even more complex in the future. It is
my determination in facing up to them
now to leave the United States a foreign
affairs instrument better able to compre-
hend them in the future
iht

If Franklin and Jefferson could see
the amazing diversity of activities en-
compassed by the modern diplomatic
establishment, they would be in-
credulous. I hope, however, that they
would approve of our efforts to make
science and technology serve this
nation's broad interests in the world to-
day. ■

Iran-Iraq War

Following is a statement made by
Jose S. Sorzano, U.S. Deputy Permanent
Representative to the United Nations, in
the Security Council on May 30, 198U,
and text of the resolution adopted by the
Council.

AMBASSADOR SORZANO1

This Council has long been seized with
the tragic war between Iran and Iraq.
This war has dragged on for much too
long— almost 4 years. It has already in-
flicted perhaps as many as half a million
casualties among combatants, innocent
civilians, and children and brought about
untold property damage. Emotions have
understandably run very high on both
sides.

This Council has met repeatedly in
an effort to stop or suspend or
ameliorate this conflict. Since Septem-
ber 28, 1980, the Council has approved
four resolutions calling for a cease-fire.
It has sought the good offices of the
Secretary General and his represent-
atives in working toward conciliation of
the parties, endorsed the efforts of the
Prime Minister of Sweden, and issued
five Security Council presidential
statements, including, most recently,
condemnation of the illegal and unac-
ceptable use of chemical weapons in this
tragic war. The United States
wholeheartedly supported and continues
to support all these efforts.

Despite all these efforts, the war
continues adding to its already terrible
costs. And, as so often happens when
things do not get better, they do not
stay the same either— rather, they get
worse.

The war not only continues but it ex-
pands, posing an increasing threat to the
stability of the region and even to the
global economic system. The accelera-
tion of attacks against shipping in the
gulf, particularly attacks against ship-
ping going into or out of the ports of
nonbelligerent states, threatens not only

-August 1984

those states but indirectly poses a poten-
tial threat to world price levels and in-
flation just at the moment when world
economic recovery and a healthy
economic expansion is beginning to get
under way.

The Council's specific concern today
is the request of the six members of the
Gulf Cooperative Council to consider at-
tacks against nonbelligerent merchant
vessels in international waters of the
gulf and in the territorial waters of
nonbelligerent states. It is completely
appropriate that we should directly ad-
dress this problem.

It is well known that rights of free
passage of innocent shipping in interna-
tional waters has long been enshrined in
international law as a fundamental right,
representing common interests of all
states. Roman lawyers characterized the
sea as res communis— by which they
meant it is beyond appropriation. Their
characterization has influenced the con-
cept of freedom of the seas as we know
it today. It is too important a right, too
important a concept to an increasingly
interdependent world, to permit it to be
trampled upon.

We recognize that many of the
issues which have been raised concern-
ing this ongoing war are complicated.
We wish they all could be resolved. We
earnestly desire an overall settlement.
We welcomed the fact that one of the
parties to the war accepted in principle
the cease-fire called for in Security
Council Resolution 540, and we hope
that, in time, the time will come when
both parties can agree to a cease-fire
and mediation leading to a resolution of
their differences.

However, we believe this is no
reason not to straightforwardly address
the issue of attacks on shipping as re-
quested by the representatives of six
states which asked for this meeting, just
as this Council separately addressed the
frightful issue of chemical weapons use.

We, therefore, agree with the
members of the Gulf Cooperative Coun-
cil that this Council should take a clear
and unambiguous stand against the ex-
tremely dangerous expansion of the war
by attacks on innocent vessels in inter-
national waters or in the territorial
waters of noncombatants. We firmly
support the views expressed by the Gulf
Cooperative Council states and the
League of Arab States on this issue.

The Gulf Cooperative Council's reaf-
firmation of the principle of collective
security and its expressed determination
to respond to threats to the security of
member states reflects deep concern
about recent developments. The United

WESTERN HEMISPHERE

States shares that concern. As President
Reagan said recently, the gulf states are
concerned about not enlarging the
war— as we all should be. We must pre-
vent a widening of the war in the Per-
sian Gulf which might disrupt the vital
flow of oil and, for that reason, we urge
that the Council take meaningful action
in addressing this critically important
matter.

SECURITY COUNCIL
RESOLUTION 5522

The Security Council,

Having considered the letter dated 21
May 1984 from the representatives of
Bahrain, Kuwait, Oman, Qatar, Saudi Arabia
and the United Arab Emirates (S/16574) com-
plaining against Iranian attacks on commer-
cial ships en route to and from the ports of
Kuwait and Saudi Arabia,

Noting that Member States pledged to
live together in peace with one another as
good neighbors in accordance with the United
Nations Charter,

Reaffirming the obligations of Member
States to the principles and purposes of the
United Nations Charter,

Reaffirming also that all Member States
are obliged to refrain in their international
relations from the threat or use of force
against the territorial integrity or political in-
dependence of any State,

Taking into consideration the importance
of the Gulf region to international peace and
security and its vital role to the stability of
world economy,

Deeply concerned over the recent attacks
on commercial ships en route to and from the
ports of Kuwait and Saudi Arabia,

Convinced that these attacks constitute a
threat to the safety and stability of the area
and have serious implications for interna-
tional peace and security,

1. Calls upon all States to respect, in ac-
cordance with international law, the right of
free navigation;

2. Reaffirms the right of free navigation
in international waters and sea lanes for ship-
ping en route to and from all ports and in-
stallations of the littoral States that are not
parties to the hostilities;

3. Calls upon all States to respect the ter-
ritorial integrity of the States that are not
parties to the hostilities and to exercise the
utmost restraint and to refrain from any act
which may lead to a further escalation and

■ conflict;

4. Cm !iese recent attacks on com-
mercial ships en route to and from the ports
of Kuwait and Saudi Arabia;

wands that such attacks should
cease forthwith and that there should be no
interference with ships en route to and from
States that arc not parties to the hostilities;

6. Decides, in the event of non-compliance
with the present resolution, to meet again to
consider effective measures that are commen-
surate with the gravity of the situation in
order to ensure the freedom of nagivation in
the area;

7. Requests the Secretary-General to
report on the progress of the implementation

of the present resolution;

8. Decides to remain seized of the matter

'USUN press release 49.

2 Adopted by a vote of 13-0, with two
abstentions (Venezuela and Zimbabwe) on
June 1, 1984. ■

Future Opportunities for U.S.-Latin
American Trade: The U.S. Perspective

by Langhorne A. Motley

Address before the National Center
for Export-Import Studies, Georgetown
University, on June 15, 198i. Ambas-
sador Motley is Assistant Secretary for
Inter-American Affairs.

It is a special pleasure for me to par-
ticipate in this conference on U.S.-Latin
American trade relations. Trade is im-
portant to all of us. It affects not only
our economic relationship but also the
whole range of political, social, and
cultural ties. It is encouraging that this
issue is being addressed in depth by a
group such as this.

One of the most striking trends of
the past 20 years has been the tremen-
dous growth of U.S. international trade
as a share of GNP. Over the past 14
years it has doubled — from $35 billion in
1960 (6.9% of GNP) to $469 billion in
1983 (13.2% of GNP). Moreover, the
developing countries — and particularly
Latin America — are playing an increas-
ingly important role in U.S. trade. The
Latin share of our total imports, for ex-
ample, has grown from 13% ($23 billion)
in 1978 to 16% in 1983 ($41.7 billion) —
notwithstanding recessions, debt crises,
and the widely held perception that
Latin exporters are being pushed out of
the U.S. market by other competitors.

But I won't dwell on statistics. What
1 would like to offer you, instead, is my
view of our trade future, especially the
overall U.S.-Latin American relation-
ship. I also have a few simple points to
make — points which are easy to say but
which need much hard work and
thought to implement.

The Costs of Protectionism

My first point is that trade is a two-way
street. It is also a good thing. Though I
need not convince this audience, it is

something which is not always under-
stood or accepted widely either here in
the United States or in Latin America.
And trade appears to be under increas-
ing attack. A recent poll, for example,
showed that 77% of the American public
favored more restrictions on imported
products, and an absolute majority
favored high tariffs. Concern about loss
of American jobs was found to be the
main influence on public attitudes — out-
weighing the prospect of lower prices,
wider choice for consumers, or new jobs
in the export market. Similar attitudes
are prevalent in Latin America, par-
ticularly under the twin pressures of re-
cent economic difficulties and the desire
to develop domestic industries.

I might add that, although we refer
to ourselves as a "developed" nation,
that does not imply that our economy is
stagnant. We are still "developing"
ourselves. And just as restricted trade
introduces rigidities into less developed
economies, it also distorts our own pro-
duction pattern.

We, therefore, have a major chal-
lenge— and responsibility — to gain
broader public understanding and ac-
ceptance of the benefits of trade. That
will not be easy, because change arising
from trade is often disruptive and
therefore hard to accept. But change is
also the foundation of all innovation and
economic progress. We need to make
clearer to our respective publics the
enormous costs of protectionism and of
trying to maintain the status quo.

That brings me to my second point.
Protectionist pressures — in the United
States and abroad — are strong, but I
believe the United States has been
remarkably successful in resisting them.
Indeed, when one looks objectively at
the structure of protection of major
trading countries, the United States is
notable for its openness. Let's look at
tariffs.

WESTERN HEMISPHERE

First, much of our trade — almost a
;hird of it — is completely free of duty.
The percentage of Latin American pred-
icts which enter the United States duty-
free (30% in 1983) has consistently been
ibove that of the developing world as a
whole (28%), and above that of Latin
America's most formidable competitors
n Southeast Asia (27%).

Second, on that portion of our trade
which is not free, the average duty is
ow (5.4% in 1983) and is steadily declin-
ng as we implement the tariff reduc-
tions negotiated in the last round of
multilateral trade negotiations. Latin
American products enter with lower
duties than the global average. The
iverage duty paid by Latin American
oroducts has been cut in half in the last
5 years— from 6.4% in 1979 to 3.1% in
1983.

Third, we have very few high
tariffs, the kind which are major im-
oediments to trade. Three-quarters of
Dur tariffs are below 5%, and less than
1% of trade is subject to tariffs of more
than 20%. We do have some problems,
}f course. Tariff escalation, the upward
tairstepping of duties as the degree of
orocessing increases, is still prevalent in
;he developed countries, including the
United States. As you know, U.S. raw
material imports are frequently duty-
free, but many processed products are

1 dutiable. On semifinished manufactures,
< for example, our duties — after full im-

■ alementation of the multilateral
negotiated reductions — will average
3.1%, and for finished manufactures,
7%. Hence, the effective rate of protec-

' '.tion for the processing operation can be
relatively high.

On the whole, however, we in the
United States can take pride in the
openness of our market compared to
other developed countries. Canada's
average duty on imports from develop-
ing nations is 11% and one-fifth of all its
imports enter at tarriff rates above
20%. In Japan, half of the duties on
goods from the developing world are 5%
or more, while about one-twelfth of
duties exceed 20%.

As you know the problem these days
lies much more in nontariff barriers.
Here again, our record is good. True, we
have quotas on a few products and sec-
tors, some of them — such as textiles and
sugar — particularly important to Latin
America. On several more agricultural
items there are quotas to protect
domestic support programs; e.g., cotton,
peanuts, though they generally have not
limited trade. There are a few important
items where quotas or voluntary export
restraints are in effect because of ad-

August 1984

justment problems in U.S. domestic in-
dustries— steel, autos, textiles. But
when you look at the total structure of
our trade, this list of items under
restraint is remarkably small.

Let us also look at the way in which
we have used the "safeguards" provision
of our trade legislation (the so-called
Section 201 injury findings). Since
January 1975, the U.S. International
Trade Commission (ITC) has heard 50
petitions from U.S. industries and
workers claiming injury from rapidly
growing imports and seeking some sort
of import relief — quotas and/or in-
creased tariffs. Of those 50 cases, the
ITC actually found injury in about half.
And of those, the President decided to
actually impose relief in only 12.

The Future of U.S.-Latin
American Trade

The outlook for U.S.-Latin American
trade reveals some strong positive signs,
as well as a few questions. The
strongest plus is also the most obvious
one. After the economic difficulties of
the past 2 years, the world economy is
experiencing a real turn-around.

The U.S. economy in 1984 is ex-
pected to grow about 5.9%; while the
OECD [Organization for Economic
Cooperation and Development] should
grow a strong 4.0%. In 1985, U.S.
growth is projected at 4.1%, while the
OECD should experience an expansion
of about 3.5%. The strong U.S. and
world recovery will be a driving impetus
to inter-American trade. U.S. imports
from Latin America in 1983 were up by
11% over 1982. Preliminary data for
1984 — first quarter figures — show an in-
crease of 31% over the first quarter of
1983. Projecting unadjusted quarterly
figures is risky, of course. If this trend
continues, however, imports from the
region could increase by nearly $13
billion by year-end.

Another positive development is the
U.S. Government's strong commitment
to special opportunities for developing
countries in general and for the Carib-
bean Basin, in particular. The Caribbean
Basin Initiative (CBI) represents a
milestone in our relationship with the
area. It eliminates duties on virtually all
products imported from the region. The
CBI not only opens up dramatic new op-
portunities for investment, employment,
and broadbased growth in the region,
but it also represents a long-term U.S.
political commitment. The program of-
fers a real inducement for investors over
a period of 12 years. The CBI was
passed by a broad bipartisan coalition in

the Congress and continues to enjoy
support from both sides.

The scope and duration of the CBI
program also means that it offers incen-
tive beyond its immediate trade objec-
tives. Those countries which have the
right policy framework to promote in-
vestment and innovation will best be
able to seize those trade opportunities.
The CBI increases very significantly the
payoff for appropriate economic policies.

Like the CBI, the generalized
system of preference (GSP) offers
specific benefits — preferential duty-free
trade — as well as powerful indirect in-
centives for economic policy reforms.
But unlike the CBI, we are still in the
process of renewal of the GSP legisla-
tion. The Administration's proposal to
extend the GSP for another 10 years
was introduced in the Congress last
August, and we hope that the legislation
will be renewed before its January 1984
expiration. We have passed one crucial
hurdle: last month the Senate Finance
Committee approved the Adminis-
tration's proposal with only minor
amendments.

There has been some concern about
the shape of the new legislation, in-
cluding criticism of the concentration of
benefits among a few relatively ad-
vanced developing countries, such as
Taiwan, Korea, Hong Kong, Mexico, and
Brazil which utilized about two-thirds of
the benefits in 1983. There is also con-
gressional and private sector concern
about the lack of market access for U.S.
products in some of the leading
beneficiary countries.

The Administration's proposal builds
on the existing legislation but contains
additional provisions addressing the
issues of graduation and further
liberalization. Under the proposal, all
beneficiaries will be given an opportuni-
ty to increase their GSP benefits on a
product-specific basis. For least
developed beneficiaries, the increases
will be automatic. Increased GSP
benefits will be made possible through a
new provision granting the President
the authority to waive competitive need
limits with respect to individual prod-
ucts. In making such determinations, the
President will give great weight to the
extent to which a country is willing to
provide equitable and reasonable access
to its market commensurate with its
level of development.

Our proposal will also grant the
President discretionary authority to
reduce competitive need limits on some
highly competitive GSP products. This
authority, which would replace our cur-
rent discretionary graduation policy,

WESTERN HEMISPHERE

would thereby enhance the program's
predictability. It may also help to

aage the concerns of some members
of Congress who would prefer to see
some beneficiaries — e.g., the top three
or five — removed entirely from the pro-
gram.

The final positive sign which I see in
our future trade relationship — one which
is often overlooked in the current at-
mosphere— is the fundamental strength
of Latin American economies. This
region has a well-educated and trained
population. It is endowed with a wealth
of natural resources, has good in-
frastructure, an extensive industrial
base, and well-developed governmental
and other institutions. To a large extent,
the current debt problems which so
many Latin American countries face
now reflect past successes and bank-
ability. There are, of course, some
uncertainties.

Debt. The first challenge, of course,
is debt. The past few years have seen a
downward economic spiral caused by
world economic problems, compounded
by internal policy and institutional
rigidities in many Latin American coun-
tries. We are moving out of that reces-
sionary phase. Led by the United States,
the world economy is growing. There
has also been a growing commitment by
the region's leaders over the past 5
years to redirect government policies to
encourage production, innovation, and
exports. With such changes, social prog-
ress will be more durable because it will
be built on the solid foundation of effi-
ciency and international competitiveness
rather than artificial protection of small
markets.

At this point let me say a few words
about our evolving approach to manag-
ing external debt problems. Our
response to the debt crisis in Latin
America and the Caribbean is a broad-
based five-part strategy combining:

• Economic recovery and open
markets in the industrialized countries;

• Economic adjustment by the
debtor countries;

• Support for a strengthened Inter-
nati a etarj Fund and other inter-

al financial instituti

• Special financing when di
emergencies occur:

• Coi i nercial bank
financing on a prudent basis.

hout being complacent, I believe

that our strategy is working in broad

i' i fie ib
cessfully with future strains.

President Reagan and his colleagues
at the recently concluded economic sum-
mit in London confirmed that the cur-
rent approach is working and pledged to
take various actions that will strengthen
th( strategy further. Among the im-
provements recommended are closer
cooperation between the IMF
[International Monetary Fund] and the
World Bank, with a strengthening of the
bank's ability to foster development over
the medium- and long-term, a will-
ingness to negotiate the official and of-
ficially guaranteed debt on an extended
multiyear basis, and a study of ways to
improve the operation of the interna-
tional monetary system.

Adjustment by debtor countries is a
key element in our approach. These
policy and institutional changes are con-
structive and necessary. They will
ultimately pay off with higher growth
and more jobs for the people of the
region. But they often involve significant
short-term costs. Opening protected
markets, streamlining bureaucracies,
making enterprises pay for themselves
rather than depend on subsidies, can all
be highly disruptive in the short-term.
Many countries are experiencing the
pain right now — lost jobs, higher prices,
less services — costs which, tragically,
are most acutely felt by the poor, who
can afford it least.

But these adjustments must be pur-
sued with courage and determination.
Political courage is required to adopt
correct, if temporarily unpopular,
policies which are indispensable to
creating a solid foundation for future
broadbased economic benefit. It will take
courage and patience on the part of the
people of the region to cope with
massive economic problems and, in some
cases, with violence and political turmoil.

Multilateral Liberalization. The

second challenge is to regain momentum
toward a concerted multilateral
liberalization of trade. Our past suc-
cesses in the international arena are im-
pressive, but they are in the past. The
tasks before us are broader and more
difficult. They go well beyond lowering
high duties remaining on some products
and dismantling the bewildering array of
nontarriff barriers — many ostensibly
designed for purposes other than trade
restrictions.

The whole definition of "trade" is
ing. It is no longer just a bag of
wheat or a piece of machinery going
from port A to port B. It's data— in the
shape of an electronic impulse — flowing
from computer A to computer B. It's
engineering advice going from one brain
to another. Future trade will necessarily

reflect an extraordinary shift in human
activities, which we are experiencing but
still do not fully understand — the shift
from producing goods to producing in-
formation and services. We all know
about U.S. deficits in merchandise trade,
but remember that last year we had a
surplus of $30 billion in the service ac-
count. This has been a growing success
story for years. Service trade now ac-
counts for over one-third of total U.S.
international commerce with a dollar
value in excess of $239 billion in the past
year alone.

The future offers a long trade agen-
da which needs to be addressed now.
Two years ago, economic and trade
ministers from almost 100 countries met
in Geneva to deal with the trade prob-
lems of the 1980s. That meeting was a
start in defining the issues. There's a lot
of work ahead before we can speak of
real progress — better international rules
and substantial new trade opportunities.
We must pursue that agenda vigorously.

For the United States, it is essential
that new or partially protected areas of
international trade be brought under full
protection under the GATT [General
Agreement on Tariffs and Trade].
Despite their importance, agricultural
products to date have not been treated
as any other commodity. Agriculture
should be brought under full GATT
discipline. Additionally, given the diver-
sity of trade in new services — banking,
insurance and other financial services,
engineering, communications, data proc-
essing, and telecommunications — it will
be necessary to develop principles to
govern this trade and encourage its ex-
pansion. It must be done, because ex-
perience shows that restrictions in na-
tional markets will fragment trade in
services, stifle competition, and raise
prices. Services need to be an important
part of any trade negotiation that aims
to contribute to global prosperity.

There is of course, another side to
this bargain. Developing countries, if
they are to lower import barriers, will
want concessions from the United States
on items like textiles, shoes, and steel.
The political problems at home will be
considerable. Thus, the next round of
negotiations should prQe to be the most
difficult of any to date^Jut, at the same
time, it is more than ever indispensable
to get nations to negotiate.

Latin American countries have a
vital stake in multilateral trade
liberalization. The import substitution
approach to development is now largely
discredited among serious students of
such matters. Many developing countries
have recognized the drawbacks of im-

Department of State Bulletir

WESTERN HEMISPHERE

port substitution and have moved
toward freer trade of their own volition.
Many have been encouraged to do so by
the IMF and the World Bank in the con-
text of needed stabilization and struc-
tural adjustment programs, but the pace
has been slow.

Unless Latin American countries ex-
pand their exports enough to both serv-
ice their debt and restore more normal
import levels, they are likely to face
political unrest on top of their economic
woes. But they must pursue the adjust-
ment programs which they have begun
and restore their international com-
petitiveness through structural and ex-
change rate reforms instead of using im-
port barriers and subsidies to balance
their trade. Otherwise, both their im-
ports and exports are likely to be inade-
quate.

Conclusion

The crucial importance of attracting the
Latin American and other major
developing countries to the bargaining
table lies in the linkages among our _
respective economies. If the economic
health of the developing countries is not
restored, our economy will suffer as
well.

In short, the stakes are high. Trade
negotiations offer Latin American and
other developing countries the oppor-
tunity to gain greater market access in
industrial countries while they reduce
tariff and nontariff barriers in their own
interest.

Returning to my earlier theme of
development and trade as constructive
change, adaptation to change is almost
always painful but is both necessary and
beneficial in the long run. That is as true
in Latin America as in the United
States. If we consider the inter-
American market as a single entity, the
opportunities for productive interchange
and cooperation are staggering. This
potential must be turned into tangible
and real opportunities through deter-
s mined and consistent pursuit of market-
oriented and trade-promoting policies by
the region's governments. ■

U.S. Central American Policy
at a Crossroads

by Langhorne A. Motley

Statement prepared for the Subcom-
mittee on Western Hemisphere Affairs of
the House Foreign Affairs Committee on
May 2, 1984. Ambassador Motley is
Asssistant Secretary for Inter-American
Affairs. l

In 1979, one of my predecessors testified
before this subcommittee that Central
America was at a crossroads, with one
path leading to violent and radical change,
the other to democratic reform. Yet many
believed that a foreign policy for Central
America based on democratic reform was
unrealistic because, except in Costa Rica,
democracy couldn't survive in Central
America.

Today Central Americans have made
their choices. Except for Nicaragua, our
neighbors have chosen the path to democ-
racy. Over the last 5 years, Honduras
has elected a civilian president, El
Salvador has had two free elections, and
Guatemala has begun to move toward
constitutional government.

T< day it is the Unit ad States that is
at a crossroads. Will we support the ef-
forts of Central Americans to build democ-
racy and peace? Are we prepared to pur-
sue a policy that will persuade the San-
dinistas to abandon their violent and
radical course? Or will we return to the
alternating neglect and interventionism
that marked our relations with Central
America in the past and that have con-
tributed so much to the problems we face
today?

This is not the moment for the United
States to falter. Without our help, our
neighbors would face an unequal struggle.
As Secretary Shultz said on March 20:

If regimes responsive to Moscow and
Havana and hostile to the United States are
installed in Central America, we will pay a
high price for a long, long time.

Support for democratic reform and
peace in Central America requires con-
fidence in ourselves and in our neighbors.
It requires providing democratic forces
with the resources they need to get the
job done in the face of grave threats. And
it requires acting with steadfastness and
political determination throughout the
region.

That is why I believe the approach
developed by the National Bipartisan
Commission on Central America is in the
best interests of the United States and
should be supported by the Congress.

r August 1984

I will not repeat here the many argu-
ments presented by the Administration
and the independent bipartisan commis-
sion before this and other interested com-
mittees. Those testimonies, and the
almost 1,000 pages of the bipartisan com-
mission's Report and Appendix,1 analyze
the crisis in Central America and how the
United States should respond to it in ex-
haustive detail.

Rather, I will focus on two points:

• Why Central America's dynamic
confronts us with a choice we can defer
only at our peril; and

• An update with particular regard
to Nicaragua, El Salvador, and prospects
for a comprehensive regional settlement.

THE LAST 5 YEARS

At this time 5 years ago, Central
America's traditional order was in serious
trouble.

• Nicaragua's National Guard faced
popular uprisings in Leon, Esteli, and
Masaya, while Nicaraguan patriots like
Eden Pastora were in Costa Rica and
Honduras preparing what proved to be
their final campaign against General
Somoza.

• In El Salvador, General Romero's
government was paralyzed by its own in-
eptitude and repression and by the ter-
rorism of young radicals who were amass-
ing substantial popular support.

• In Guatemala, the government of
General Lucas had been implicated in
assassinations of moderate politicians and
was in increasingly open conflict with the
Catholic Church; the countryside was
prey to armed bands from left and right.

• Honduras was more peaceful, but
it, too, had a military president, a
suspended constitution, and a simmering
conflict with El Salvador.

• Only democratic Costa Rica was
free of violence.

Today, the traditional dictators are
gone. But now the pendulum threatens
to swing all the way from rightwing dic-
tatorship to communist totalitarianism.

• General Somoza is gone. But his
self-appointed successors have so re-
pressed their people that many, including
Pastora, have again taken up arms, this
time against the communization of their
country.

WESTERN HEMISPHERE

• General Romero is gone. El
ador is in the midst of its second sue-
ful national election in 2 years, but

the relentless guerrilla assault supplied
and managed from Cuba and Nicaragua
continues.

• General Lucas is gone. Although
his successors have also been generals,
Guatemala is preparing for Constituent
Assembly elections in July and national
elections in 1985.

• Honduras has a restored constitu-
tional order and a strong civilian presi-
dent. But, although it has made peace
with El Salvador, it now faces constant
threats from Nicaragua.

• Costa Rica remains vibrantly
democratic. But it, too, is threatened by
Nicaragua.

Politically, these events reflect two
opposing trends:

The first is the gradual democratiza-
tion of Central American life. This very
real trend suggests that those who argue
that Central Americans are not ready for
democracy are out of touch with what has
been happening there in recent years.

The second trend is the Cuban-Soviet
militarization of Nicaragua and of the con-
flict in El Salvador for antidemocratic
purposes. Cuba and the Soviet Union
have provided the military and technical
infrastructure to redirect the Nicaraguan
revolution and inflame the entire
isthmus.

These changes have come about so
rapidly that many observers have been
caught off guard.

• To this day many Americans still
look at El Salvador as if it were the
semifeudal state of the pre-1979 era. It is
not.

• Many still view Nicaragua as it
was in mid- 1979: newly liberated from the
Somoza dictatorship; pledged to the world
and its neighbors to be democratic,
nonaligned, and nonaggressive. That view
i.^. at best, naive.

• Many still ignore the escalating
Cuban and Soviet military intervention
underway in Central America. Yet it has
global as well as local implications.

• And, most ironically, some assume
that the United States itself has not
changed, that we, government and critics
alike, are still incapable of viewing Cen-
tral America in anything more than the
simplest of stei

Yel today, were il not for the United

States, the struggle between the ad-
vocates nf democracy and their armed
communist enemies would I e itely

unequal— not because of numbers, for

overwhelming majority of Central
Americans have always supported
democracy when given a chance, but
because of Cuban- and Soviet-supplied
guns wielded to prevent a free choice.
Nicaragua's buildup gives the San-
dinistas military power unimagined in the
annals of Central American militarism.
Somoza had 12,000 men under amis; the
Sandinistas boast of having 100,000 or
more. Somoza had 3 tanks and 25 armored
vehicles. The Sandinistas have more than
50 medium tanks and at least 80 armored
vehicles, plus amphibious light tanks,
tank ferries, and multiple rocket launch-
ers. With Soviet and Cuban encourage-
ment and resources, the Sandinistas have
turned Nicaragua into a general head-
quarters for thousands of guerrillas
throughout the isthmus. Ironically, this
buildup began the day the Sandinistas
moved into Somoza's bunker, even as the
rest of the world was prematurely
celebrating the end of Nicaraguan
militarism.

Nicaragua's neighbors would be
unable to preserve a balance if they could
not count on the United States. Costa
Rica has no army. Honduras, even now,
has but 16 light tanks and a dozen ar-
mored vehicles. And across the Gulf of
Fonseca from Nicaragua, guerrillas are
using the military technology and sup-
plies they receive through Nicaragua to
fight democratic reforms supported by an
overwhelming majority of Salvadorans.

This is why we now face a critical
choice. We have had 5 years to determine
what is happening. It is obvious that the
overwhelming majority of Central
Americans want democracy. They are
clearly capable of working and even
fighting for it. Equally, Cuba and the
Soviet Union are attempting to turn Cen-
tral America's travails to the disadvan-
tage of both Central America and the
United States. And a distinguished and
independent bipartisan commission has
reviewed the evidence and provided a
blueprint for a long-range solution. The
Administration has accepted that
blueprint.

We have, in short, a coherent policy
that addresses the need to help strength-
en democratic institutions and to lay the
basis for equitable economic growth in a
more secure environment. But, though no
alternative has been put forward, we are
still not providing the resources our
neighbors need. It is as if we had decided
to wring our hands at the absence of
quick and easy solutions. It is not a pretty
picture.

The words of the 1984 Easter pastoral
of Nicaragua's Roman Catholic bishops,
"it is useless to blame everything on the

evils of the past without recognizing the
deficiencies of the present," apply to us
as well.

What will we say 5 years from now if,
on top of our past failures in Central
America, we now turn our backs on our
neighbors when they face armed com-
munism as well as continued resistance to
democratic change from extremists of the
right?

SOME SPECIFICS

Let me be more specific, by country.

El Salvador

Few predicted in 1979 that the Salva-
doran Government would prove capable
of launching and carrying through major
reforms. Yet the government that
ultimately emerged from the 1979 coup
against General Romero, composed of the
armed forces and the Christian Democra-
tic Party, succeeded in breaking the
power monopoly of the old ruling order
and installing a new alternative and a new
perspective. This new perspective has
been evident in the current election cam-
paign: not even the candidates of the
right suggest reversal of the reforms.

On March 28, 1982, more than 1.5
million Salvadorans turned out to vote in
that nation's first free and fair elections
ever. They believed that their vote was
important, and they were not disap-
pointed. Power passed peacefully to a
Government of National Unity headed by
independent Alvaro Magana. The elec-
tions did not end the war, but they pro-
duced a Constituent Assembly which
passed an amnesty law, authorized a
Peace Commission to try to bring the
guerrillas into the democratic process,
and adopted the new liberal constitution
under which El Salvador now lives. The
reforms continued: the assembly extend-
ed the land-to-the-tiller program three
times. Under this program, President
Magana's administration has re-
distributed more land than the previous
government.

Now El Salvador is in the midst of tht
next phase of its transition to democratic
government. Whoever is elected presi-
dent of El Salvador on Sunday will have a
mandate that represents a majority of the
voters.

Some commentators have predicted a
military coup if one or the other candidate
wins, but I can tell you we have seen no
evidence of this. The armed forces have
maintained a professional distance from
politics and worked to protect the
physical security and institutional integri-

Department of State Bulletin

WESTERN HEMISPHERE

y of the process. The words of the OAS
Organization of American States]
ibservers to the first round of voting, on
itarch 25, are worth noting:

The Armed Forces deserve praise for the
orrect manner in which they provided securi-
y to the voters and for their cooperation with
he citizenry in defending their right to ex-
iress their political preference without undue
nfluence.

Though there is still a long way to go,
31 Salvador has also made great strides in
mman rights. Political violence is down
sharply from 3 and 4 years ago. Salva-
loran political and military leaders,
jacked by the United States, have en-
sured that death squad activity can no
onger be cloaked in the guise of
'patriotic anticommunism." Death squad
dllings are murder and are being con-
demned as such by Salvadoran public
)pinion. The death squads have as their
joal the destruction of democratic rule
and social reform— they represent a
virulent but declining opposition to the
government and its reforms.

Progress also has been made, again
not without difficulty, in all cases of
•nurdered American citizens. In the only
;wo cases in which suspects have not
oeen identified, the deaths of John
Sullivan and Lt. Cmdr. Albert
Schaufelburger, investigations proceed.
The Salvadoran Government's pursuit of
these cases and the enthusiasm we have
seen during our project to help upgrade
their judicial and investigative
capabilities demonstrate their desire for
genuine improvement across the board,
not just in politically sensitive cases.

Most importantly, and this is admit-
tedly difficult to measure, there is a new
attitude in El Salvador. Every
Salvadoran— whether government official,
member of the armed forces, business-
man, politician, or private citizen— is
aware of the fundamental importance of
human rights. In the long run, that is the
most important consideration, because it
is they, not us, who must prevent further
abuses in their own society.

El Salvador has now begun to counter
economic destabilization, which is the key
to the guerrillas' "prolonged war"
strategy. From 1979 through 1982, the
Salvadoran economy declined sharply due
to guerrilla violence and adverse
developments in the world economy. Per
capita income fell by about one-third in
real terms, to levels El Salvador had
achieved in the early 1960s. But in 1983,
with the help of U.S. assistance, the
economy finally stabilized. The cost of
guerrilla violence to the economy is still
greater than the value of all U.S.

August 1984

economic assistance during the same
period, but with our continued assistance,
the Salvadoran economy could begin to
grow again in 1984-85.

In short, in the last 5 years, El
Salvador has survived an externally sup-
ported guerrilla war to achieve:

• The beginnings of reform, stabili-
ty, and increased democracy in the
political field;

• Sharp reductions in human rights
abuse with the clear prospect of further
progress; and

• Economic stabilization, albeit still
at a low level.

In only one major area of concern can
I report little definitive progress over the
last 5 years— the military sphere. There is
little immediate danger of a guerrilla vic-
tory in El Salvador. The armed forces can
force the guerrillas to abandon positions.
And there have been improvements in
command structure, force levels, and tac-
tics. But the nation remains vulnerable to
high-impact guerrilla raids; critical securi-
ty tasks such as protecting the elections
are still being provisioned on a hand-to-
mouth basis. The Salvadoran Armed
Forces do not have the capacity at this
time to force the guerrillas to abandon
their pursuit of a military victory or to in-
duce them to accept participation in an
open, democratic process.

I regret to say it, but U.S. support for
creating a better society in El Salvador
has not kept up with Cuba's and
Nicaragua's admittedly easier objective of
destroying it through support for ter-
rorism, sabotage, and guerrilla war.

In the same period in which we have
seen such progress in the political, human
rights, and economic arenas, the Ad-
ministration's requests for military
assistance have been regularly under-
funded. This past year, for example, while
the second Continuing Resolution for FY
1984 was being considered, the National
Bipartisan Commission was working to
develop a long-range strategy for Central
America. Military assistance for El
Salvador was appropriated at a low level
while we awaited the commission's
findings.

The bipartisan commission
unanimously recommended that the
United States provide to El Salvador
"significantly increased levels of
military aid as quickly as possible, so
that the Salvadoran authorities can act
on the assurance that needed aid will be
forthcoming" [emphasis in the report]. It
added that there is "no logical argument
for giving some aid but not enough.
The worst possible policy for El Salvador
is to provide just enough aid to keep

the war going but too little to wage it
successfully."

Although underfunding is helping to
prolong the conflict, the Administration's
request for $178 million in supplementary
assistance has not been acted upon in this
House, even after intense consultations
and after the Administration's willing-
ness—and the Senate's bipartisan ac-
tion—to approve an initial $62 million for
the most urgent needs.

That, in a nutshell, is the explanation
for the President's use of the emergency
provision of Section 21(d) of the Arms Ex-
port Control Act to assist El Salvador by
allowing it to defer payments on essential
defense articles. We had run out of time.
Were the Salvadorans unable to protect
the election from guerrilla disruption,
who would give the Salvadoran Govern-
ment the benefit of the doubt? How many
would have said that the Salvadorans
"cannot win" and that we should push
them to accept an undemocratic power-
sharing deal with the guerrillas? With our
own lack of firmness so fully displayed,
any such deal would lead directly to the
kind of power play in El Salvador we saw
the Sandinistas achieve in Nicaragua in
1979-80.

The Salvadorans need and deserve
our support. Not just token support but
support adequate to a difficult task. They
have proven themselves capable when
they have the means. We should be ready
to provide them.

Nicaragua

In July 1979, Nicaragua's new leaders
pledged to the entire hemisphere that
they would hold free elections, be
nonaligned, and respect the self-
determination of peoples.

In September 1983, the Government
of Nicaragua made an even broader com-
mitment. It agreed with its Central
American neighbors and the Contadora
states— Colombia, Mexico, Panama, and
Venezuela— to negotiations to implement
21 specific objectives. These objectives in-
clude the establishment of democratic
government, an end to support for
subversion, and various military cut-
backs—both cuts in arms and military
personnel and reductions in foreign
military and security advisers with a view
to their eventual elimination.

On January 8, 1984, Nicaragua fur-
ther agreed with the Central American
governments on specific procedures to
guide the negotiation of a treaty embody-
ing the 21 points and the verification and
control measures necessary to ensure
that they are actually carried out.

WESTERN HEMISPHERE

Were the Sandinistas to meet these
commitments to their own people and
their neighbors, the basic objectives of
the United States with respect to
Nicaragua would be achieved. We ask of
the Sandinistas only that they do what
they have publicly committed themselves
to do— and what their increasingly fearful
neighbors are asking of them.

The problem, of course, is that the
Sandinistas have been moving in the op-
posite direction ever since 1979. They
have based their power not on elections
but on internal controls and militarization
and on Cuban and Soviet support. They
have systematically destroyed the broad
national coalition that overthrew Somoza.
They have harassed political critics, the
media, business and labor, ethnic
minorities, even the Catholic Church.
They have built a military establishment
many times the size of Somoza's National
Guard. They have brought in at least
2,500 Cubans and over 100 Soviet-bloc
military and secret police advisers to
develop a pervasive internal security ap-
paratus and to organize support for guer-
rilla warfare against El Salvador and
their other neighbors.

Experience has taught that we must
seek actions, not words, from Nicaragua-
action to sever military and security ties
to Cuba and the Soviet bloc; action to end
all support for guerrilla violence and ter-
rorism in Central America; action to
reduce Nicaragua's military buildup to
levels in balance with its neighbors; action
to establish a genuinely democratic
political system.

What we have seen so far is mainly
rhetoric. And I firmly believe that
without critical pressures from the
military and diplomatic aspects of out-
policy, we would not have heard even this
more accommodating rhetoric, only the
kind of destructive defiance the San-
dinistas have used with everyone from
Arturo Cruz to the Pope.

In October 1980, the Sandinistas
betrayed President Carter and the U.S.
Congress- the more than $100 million in
aid we had given them and the political
risks we took to do it. At that time we
asked them to halt their efforts to export
communism in Central America or face
U.S. opposition. They persisted, and in
January President Carter suspended aid
to Nicaragua and authorized military sup-
port for El Salvador.

Again in August 1981 and April 1982,
both times under President Reagan, the
United States asked Nicaragua to end its
support for the guerrilla insurgents in El
Salvador, offering to resume constructive
relations and economic cooperation. Again
the Sandinistas were unresponsr. e

In October 1982 in San Jose, Costa
Rica, we joined seven other democratical-
ly elected governments in making fair and
balanced proposals for regional peace.
(Those who question the depth of U.S.
support for the more recent Contadora
objectives might do well to compare them
to the principles in the San Jose Final
Act.) Nicaragua refused even to receive
the Costa Rican foreign minister as
emissary of this group.

Last year, the difficulties they were
encountering began to give the San-
dinistas second thoughts. Their domestic
critics made clear they would not be in-
timidated. International support from
democratic movements stopped being
automatic. The United States undertook
military maneuvers to help maintain the
regional military balance. The Contadora
nations insisted that Nicaragua begin to
address the complaints of its neighbors.

Nicaragua's response so far falls far-
short of meeting the basic concerns I
have outlined. The six-point "peace pro-
posal" Junta Coordinator Daniel Ortega
announced last July, for example, would
have cut off all outside assistance to the
Government of El Salvador without
affecting Cuban and Soviet assistance to
the Government of Nicaragua.

The four "draft treaties" that
Nicaragua presented in October ignored
the Contadora objective to establish
democratic institutions, did not deal with
the issue of foreign military advisers, and
made no meaningful proposals for
verification. In tabling and immediately
publicizing these treaties before the ink
was dry on the 21 objectives, Nicaragua
was trying to undercut the Contadora
process procedurally and attempting to
narrow it substantively. Since then, the
Sandinista leadership has sought
repeatedly to shift the venue of dialogue
away from Contadora— as in last fall's
failed attempt at the UN General
Assembly, at the Security Council last
month, and again now at The Hague.

In November, following the collective
action in Grenada, Nicaragua spread
word that it was reducing the Cuban
presence and telling the Salvadoran
FMLN/FDR [Farabundo Marti National
Liberation Front/Revolutionary
Democratic Front] to leave Managua.
But, in fact, as Nicaraguan Interior
Minister Borge admitted, Cuban depar-
tures were normal year-end rotations of
teachers and did not affect military or
security advisers. The Salvadoran guer-
rilla headquarters are still operating from
Nicaragua.

Now Nicaragua has announced elec-
tions for November 4. We would welcome
genuinely open elections in which all

representative political elements can par-
ticipate. Such an event would be a par-
ticular relief for Nicaragua's democratic
neighbor Costa Rica. Nonetheless, the
state of emergency, with its arbitrary
prior censorship of the media and controls
on freedom of assembly, continues. And
we have not yet seen movement toward a
framework which would ensure free and
fair elections: an end to the state of
emergency, reversal of the decision to bar
opposition leaders, full media access, and
limits on Sandinista use of state resources
and institutions for partisan purposes.
The Sandinistas' arrest of a prominent
journalist on April 29 and their denuncia-
tion of the call to dialogue issued on
Easter Sunday by the Catholic bishops
are not hopeful signs.

Like other democracies, though skep-
tical, we have, nonetheless, publicly
welcomed the Sandinistas' positive
statements. We have also made clear that
we are looking for genuine change, not
rhetoric— for real rather than cosmetic ac-
tions on our four objectives. Our most re-
cent exchange was on April 4, when
special envoy Harry Shlaudeman and I
talked with Nicaraguan leaders in
Managua. Unfortunately, the Sandinistas
remain intransigent, insisting simulta-
neously that they are not now, nor ever
have been, supplying the Salvadoran in-
surgents and also that their support has
diminished. They add that no action is re-
quired on their part to restore peace to
the region. But they know what must be
done. And the time has come for them to
begin.

Honduras

Honduras is the poorest Central
American nation, but the internal condi-
tions that facilitated the Sandinista
takeover in Nicaragua and nurtured the
development of the guerrilla movement ir
El Salvador do not exist in Honduras.

• Honduras does not have a landed
oligarchy. Land reform is a success.

• An independent and free press is
open to everyone— including the political
opposition.

• Trade unions are an effective fora
and have been so for more than 30 years.

• Although still the strongest single
institution, the military has never been a
praetorian guard for the privileged, nor it
it repressive.

But Honduras does face serious prob-
lems in building democratic institutions in
the face of extreme economic hardship
and with potential instability on every
border.

WESTERN HEMISPHERE

The Suazo government inherited an
conomy that was nearly bankrupt.
Depressed global markets for the tropical
ind subtropical agricultural products that
ire Honduras' major exports, continued
egional instability, and burgeoning
)opulation growth are all reasons why we
lave increased U.S. economic assistance
$84.4 million in the FY 1984 Continuing
Resolution; $84.5 million in the FY 1984
supplemental request; $139 million re-
quested for FY 1985).

The inflow of over 44,000 refugees
leeing internal crises in neighboring
countries has placed major additional
demands on Honduras' fragile economy.
About 18,000 refugees are Salvadoran,
700 are from Guatemala, and the rest-
more than 20,000— are Nicaraguan, the
majority Miskito and Sumo Indians.

Beginning in 1981-82, despite the
government's popularity, Honduras was
struck by a wave of terrorist and subver-
sive attacks. The timing, targets, and
accompanying propaganda made it ob-
vious that they were orchestrated by
Nicaragua to intimidate the Honduran
Government and to retaliate for depriving
the Salvadoran guerrillas of unchallenged
transit and sanctuary in Honduran ter-
ritory.

The government's reaction to the ter-
rorist violence has been firm but
measured. Fears of 2 years ago that a ris-
ing level of terrorism would provoke
police repression have not been borne
out. But the Sandinistas have not
relented. Their strategy is to increase the
political and psychological pressures
created by their military buildup and
heightened destabilization efforts. Last
July, Nicaragua infiltrated 100 Cuban-
trained guerrillas into Honduras. Most of
these guerrillas, including their leader,
were quickly captured; but the intention
was clear: to spread rural warfare to Hon-
duras as well as to El Salvador.

Honduran Army units are under-
trained; the country's total military force
is one-fourth that of Nicaragua; and its in-
ventory of transportation, communica-
tions, and air defense materiel is skimpy
and aged. In addition, Soviet and Cuban
activities in Nicaragua, including the
training of military pilots in Bulgaria, call
into question the deterrent capacity of the
Honduran Air Force, the nation's tradi-
tional defensive mainstay.

Honduras wants to avoid war with
Nicaragua and has become a major ad-
vocate of restoring a military equilibrium
through force reductions. In the mean-
time, it has not attempted to match
Nicaragua's buildup of ground forces but
has embarked upon a selective military

August 1984

modernization program to establish a
minimal deterrent for self-defense.

U.S. military assistance concentrates
on training and basic equipment. No
sophisticated weapons or systems have
been transferred to Honduras. Our
military aid ($41 million in the FY 1984
Continuing Resolution; $37.5 million in
the FY 1984 supplemental request; $62.5
million for FY 1985) would provide train-
ing, helicopters, fixed-wing transport and
communications aircraft, naval equipment
and patrol boats, vehicles, medical equip-
ment, radar, communications equipment,
ammunition, and spare parts.

To enhance Honduran and U.S.
capabilities and to demonstrate resolve,
we have also conducted a series of major
joint military exercises with Honduras.
Some temporary facilities were also im-
proved to support the exercises. In June
1983, the Hondurans established a
Regional Military Training Center to of-
fer training, with U.S. help, to friendly
countries in the region.

Military Aid and Democratization.

A frequent criticism of U.S. policy toward
Honduras is the assertion that all this
military activity weakens democracy.

A careful look at what has happened
politically— and militarily— in Honduras
over the past few years suggests the con-
trary conclusion: that the direction of
events has been from military control
toward a civilian, democratic polity.

Honduras returned to civilian and
constitutional rule in January 1982 after
nearly 18 years of military governments.
President Suazo's inauguration saw a
clear transfer of power from military to
civilian hands. This process had already
begun during the transition period of the
Constituent Assembly, when the key
Communications Ministry shifted from
military to civilian direction, as did the
Ministry of Justice and the Agrarian
Reform Institute. The Foreign Ministry
and the Forestry Agency were returned
to civilian control, leaving the Defense
Ministry and the telephone and telegraph
agency as the only major government
bodies still headed by military men.

The Liberal Party government has
since exercised unquestioned authority
and established a solid reputation for
honesty and technical competence. In
economic and political matters, including
appointments, President Suazo makes the
decisions. This has been confirmed by the
recent changes in military leadership. In
military and diplomatic affairs, moreover,
Honduras has consistently been at the
forefront in supporting a comprehensive
regional settlement.

The U.S. role is just as clear. At each
stage in the return to democratic rule the

U.S. Government encouraged the restora-
tion and specifically discouraged those
elements, which sought to maintain de
facto military rule. In addition, while not
determining politically, U.S. military
assistance has permitted the Honduran
Government to husband scarce resources
for health, education, and public works
without diverting them to military re-
quirements.

In September 1983, a Costa Rican af-
filiate of the Gallup organization asked
700 Honduran adults with at least 1 year
of secondary school what country, if any,
was either a threat or a help to Honduras.
The interviewers volunteered no names
of countries. Eighty percent named
Nicaragua as a military threat to Hon-
duras. One percent so identified the
United States. (This contrast was further
emphasized when 93% identified the
United States as helping Honduras to
solve its problems.)

In part because of U.S. support, Hon-
duras today is clearly more progressive
and more democratic than it was before
the 1980s.

Costa Rica

Five years ago Costa Rica was reeling
from the economic one-two punch of in-
creased oil prices and sharply falling cof-
fee and other primary export prices.
Deteriorating trade was exacerbated by
onerous debt-service burdens (reaching as
high as 58% of export receipts by 1983),
partly a result of overzealous foreign bor-
rowing by autonomous agencies in the
late 1970s.

In 1983, the Costa Rican Government
was able to obtain and comply with the
terms of an IMF [International Monetary
Fund] standby program for $100 million.
Austerity measures greatly slashed the
public sector deficit. Inflation was
lowered significantly. Real gross domestic
product grew slightly.

U.S. economic assistance was a signifi-
cant factor in Costa Rica's ability to
stabilize its economy. But despite the en-
couraging signs of 1983, it would be
premature to speak of economic recovery
during 1984.

Five years ago, staunchly democratic
Costa Rica was serving as a base for
numerous dissident groups fighting the
Somoza dictatorship in neighboring
Nicaragua. Tensions between Costa Rica
and Nicaragua are thus not new. What is '
new, and what deeply concerns Costa
Ricans, is the conjunction of economic
recession and the radicalism and expan-
sionism of the Sandinista regime on its
northern border. Compared to the heavily
armed Nicaraguan Army and massive

WESTERN HEMISPHERE

miliiia reserves totaling more than

100,000, Costa Rica has no army,

and its police forces total less than 7,000.

The deepest concern of the Costa
Rican leadership, however, is not the
specter of armed invasion but the longer
range threat posed by the ideological ag-
gressiveness of a Marxist-Leninist
Nicaragua bent on propagating its creed.
This concern is heightened by
Nicaragua's ties to Cuba, the Soviet
Union, and the Soviet bloc generally,
which exposes Costa Rica to externally
supported subversion backed by a huge
military and intelligence apparatus next
door.

The influx of about 20,000 Salvador-
ans and 200,000 Nicaraguans has deeply
affected Costa Rica. The several thousand
men operating in southern Nicaragua
under the command of former Sandinista
hero Eden Pastora have elicited a good
deal of sympathy for his cause among
Costa Ricans. In mid-1983 members of the
Basque terrorist group ETA were appre-
hended by Costa Rican security forces
while apparently preparing to assassinate
anti-Sandinista leaders in Costa Rica.

Faced with an armed-to-the-teeth San-
dinista regime in Nicaragua, unarmed
Costa Rica continues to rely upon the
inter-American system for its security.
While it remains militarily neutral, as
President Monge has explained, Costa
Rica continues to be a strong political ad-
vocate of democracy and a leading propo-
nent of a negotiated regional peace.

Guatemala

Five years ago the people of Guatemala
were being squeezed between an increas-
ingly repressive government and a
violent opposition that had come under
the influence of Castro's Cuba. Leading
political figures— like Colom Argueta and
Fuentes Mohr, who offered an alternative
between the two extremes— were killed,
as were church leaders, labor union
organizers, and members of the judiciary.
The government of General Lucas Garcia
rejected a plan for intense development
projects to improve life for the rural peas-
ant majority in the highlands and relied
instead on the indiscriminate use of
violence to force their allegiance. Guer-
rilla groups recruited successfully for the
first time among the Indian population.
Economically, the country was being
driven to ruin, as the government spent
millions on large capital development
projects, many of which had little chance
of success. Corruption was widespread.
The widespread human rights viola-
tions under the Lucas regime led to
substantial international isolation. Efforts

by both this Administration and the
previous one to engage Guatemala in a
dialogue about human rights concerns
were unsuccessful.

This pattern began to change in 1982.
On March 23 a group of young officers
overthrew Lucas and installed a junta
headed by retired General Rios Montt.
Rios had been the Christian Democratic
candidate for president in 1974 and by
many accounts won the elections but lost
the count to official fraud and was never
allowed to take office.

Under Rios, the government and the
army undertook a series of efforts to
regain the support of the rural population
and to seize the initiative from the guer-
rillas. Called the beans-and-rifle program,
the army reasserted itself militarily in the
highlands and began a well-conceived pro-
gram of civic action projects that pro-
vided the Indian population with food,
shelter, and medicine. At the same time
the Rios Montt government organized
rural villages into local civil defense
forces, a key factor in the government's
counterinsurgency efforts. As a result,
the insurgents were increasingly put on
the defensive throughout 1982-83.

At the same time, Guatemala was hit
by the same forces of worldwide recession
suffered by the other countries of Central
America and was particularly affected by
the collapse of the Central American
Common Market. After several years of
substantial real growth, the Guatemalan
economy was nearly stagnant in 1981,
then declined by an estimated 3.5% in
1982 and 2.0% in 1983. Austerity resulted
in sharply lower levels of consumption, in-
vestment, and imports. A sustained drop
in private investment over the past 5
years and the reduction of its Central
American export markets further
lowered production. Fiscal and monetary
restraint (supported now by an IMF-
sponsored program begun in July 1983)
will continue for the foreseeable future.
Despite his relative successes, Rios
was replaced in August 1983 by his
Defense Minister, Gen. Oscar Mejia, in a
nearly bloodless coup. The Mejia govern-
ment immediately suspended the state of
alarm, abolished the controversial special
courts, and granted an amnesty.
Moreover, the new government declared
itself transitional and committed itself to
returning the country to civilian,
democratic rule. Mejia himself refused to
take the title of president (he remains
merely head of state). He confirmed Con-
stituent Assembly elections for July 1984
and announced that an elected president
would take office in 1985.

The Mejia government has followed
through on these positive steps by taking

the necessary measures to assure July
elections by moving ahead with the
legalization of political parties, registering
voters, and decreeing an electoral law; 2.3
million voters have registered. Thirty-
seven political groups across the political
spectrum are taking steps to legalize
themselves, and some 15 or 20 are ex-
pected to participate in the July 1 elec-
tions. The United Nations, OAS, and
foreign governments have been invited to
send observers to these elections.

Serious problems remain, especially
human rights abuses. But it is important
to recognize that significant political
changes have taken place since 1982.
Political abductions and murders con-
tinue, but the general level of violence has
decreased markedly. Compared to the
Lucas period, the record of the Rios and
Mejia governments has been such that
the Special Rapporteur appointed by the
UN High Commissioner for Human
Rights to study the human rights situa-
tion reported favorably on the improved
human rights picture in Guatemala.

We have to decide now how to en-
courage further progress. Economic
assistance is vital if the Guatemalan
Government is to be able to meet the
basic needs of the people and especially
the rural Indian population which has suf-
fered the bulk of the violence. Similarly
we need to resume— in a limited and con-
ditioned fashion— a relationship with the
Guatemalan military. The Guatemalan
military still faces a serious insurgent
threat. U.S. support for those
Guatemalans who are attempting to
restore democracy, improve human
rights, meet human needs, and defeat ex-
ternally supported Marxist guerrillas is
important to help create a sounder basis
for the civilian government that will take
over next year.

RECENT DEVELOPMENTS

Our objectives in Central America today
remain as they were set forth by the
President to the Joint Session of Con-
gress a year ago. We support democracy,
development, dialogue, and security.

But recent events have highlighted
for all of us the need to focus on the vital
links between power and diplomacy. As
Secretary Shultz has emphasized, power
and diplomacy are not mutually an-
tagonistic. Peace is not achieved merely
by wishing for it— the hard reality is that
diplomacy not backed by power is
doomed.

In El Salvador, we are heartened by
the prospect that the election 4 days from
now will produce a president with a clear

Department of State Bulletin

WESTERN HEMISPHERE

wpular mandate. We have a major stake
n El Salvador's continued progress
,| oward democracy, the promotion of
mman rights, and security. Our relations
ire and will be governed by how the new
rovemment affects these interests. As
loted above, our ability to support El
Salvador's progress to date has been less
han our national interest so clearly re-
hires. The President's use of emergency
luthorities under section 21(d) in no way
liminishes the need for prompt congres-
sional action on our pending military and
•conomic assistance requests. Our ability
o press for continued economic, social,
tnd political progress, and to help provide
he security necessary to attain it, depend
>n congressional action.

With Nicaragua, also, our relations
ire at a critical stage. Again, a combina-
ion of pressure and inducements is essen-
ial. The need for pressures arises from
me fundamental reality: the need to con-
dnce the Sandinistas of the unworkability
if their starting assumption that their
^uban/Soviet ties would enable them to
issault their people and their neighbors
vith impunity.

For pressure to work, short of a
lirect military confrontation we all want
o avoid, it must have defined political
«!• foals— a reasonable alternative that
atisfies common concerns. That is the
(ssence of diplomacy in the real world.
\.nd clearly delineated goals do exist:
hey are contained in the 21 points agreed
o by all nine countries engaged in the
Contadora process last fall.

The Document of Objectives agreed
o on September 9, 1983, by the five
Central American states, including
Nicaragua, is a specific set of standards
vritten in terms fully understandable to
ill the participants. And it is a formula
hat would achieve our objectives in
Nicaragua— if actually implemented on a
verifiable and enforceable basis.

Compare our own four basic objec-
ives toward Nicaragua with the
substance of the Contadora Document of
Objectives:

• We seek an end to Nicaraguan
upport for guerrilla groups; the Docu-
ment of Objectives calls for an end to sup-
oort for subversion.

• We want Nicaragua to sever its
military and security ties to Cuba and the
Soviet bloc; the Document of Objectives
calls for the proscription of foreign
military bases and the reduction and

[eventual elimination of foreign military
advisers and troops.

• We seek reduction of Nicaragua's
military strength to levels that would
restore military equilibrium in the area;

August 1984

the Document of Objectives calls for the
reduction of current inventories of arms
and military personnel.

• We seek fulfillment of the origi-
nal Sandinista promises to support demo-
cratic pluralism; the Document of Objec-
tives calls for establishment of democratic
systems of government based on genuine-
ly open elections.

• Finally, we seek a diplomatic solu-
tion that is verifiable and enforceable; the
Document of Objectives calls for adequate
means of verification and control.

Our joint exercises with Honduras,
the fleet maneuvers, the fears of
Nicaragua's neighbors, the resistance of
the Nicaraguan people, the warnings to
the Sandinistas from Europe and from
around this hemisphere— all contribute to
this carefully developed framework of
pressure-with-purpose. What the San-
dinistas are being asked to do is clear to
them, to their neighbors, and to us. The
path to a political "solution" to regional
democracy and disarmament is encom-
passed in the 21 objectives.

To keep their commitments to their
people and the OAS, the Sandinistas
could act unilaterally or they could act as
a result of negotiations, as in the ongoing
Contadora process. How they do what
they have promised is up to them. What
matters is action— and the sooner the
better.

The basic fact is this: if the San-
dinistas adhere to those principles in a
way in which others can have con-
fidence—whether on the basis of a formal
treaty or not— its neighbors will do the
same, and so will we. The pressure will
have worked, our concerns will have been
alleviated, and a political solution will
have been achieved in Central America.

The months ahead are critical. They
will determine whether the progress to
date proves ephemeral or represents a
real move toward regional stability.

The willingness of the Central
American democracies to implement the
Document of Objectives was reiterated
by the foreign ministers of Costa Rica, El
Salvador, and Honduras on April 25. On
that date they issued a communique
reemphasizing their commitment to the
verifiable and enforceable implementation
of all 21 points. Moreover, to help advance
the negotiation of the concrete measures
required to achieve those objectives, they
declared their willingness to take the
following additional steps:

• Immediately deliver an inventory
of their countries' active and reserve com-
bat units and principal weapons systems
to a special commission of the Inter-
American Defense Board and invite the

board to send a suitable inspection team
to verify the statements made in the in-
ventories;

• Publish all military treaties and
agreements with third countries;

• Inform the Inter-American
Defense Board of arms and munitions
deliveries from external sources and
enable it to verify data concerning such
deliveries; and

• Publish the number and location of
all foreign military personnel in their
countries and permit the Inter- American
Defense Board to verify such number and
location.

This is a positive and serious contribu-
tion to the negotiating process. It is
recognition that the road to peace in-
volves a series of steps each of which, in-
crementally, brings closer the goal of a
verifiable, balanced, comprehensive, and
lasting settlement. History provides all
too many examples of treaties admirable
in intention but unconnected to reality.
The challenge to the Contadora par-
ticipants is to avoid the pitfall of signing
meaningless documents that proclaim
peace but do nothing concrete to change
the reality of continued conflict. This joint
statement conforms to a realistic ap-
preciation of the kinds of first steps re-
quired to advance the negotiating
process.

The seriousness of this offer contrasts
with the vacuousness of the statement
issued 2 days later by Nicaragua. Ignor-
ing the joint statement of Honduras,
Costa Rica, and El Salvador, the
Nicaraguan communique of April 27 ad-
vocated the immediate signing of peace
treaties. There is no mention— not even
rhetorically— in the Nicaraguan statement
of verification and control. Why? I
suspect the answer is that the Nicara-
guans know that the democracies would
be bound— by their very nature as open
societies with democratic institutions of
press, political opposition, and institu-
tional restrictions on the unbridled exer-
cise of power— to adhere to any treaties
that they sign. They know, equally, that
in the absence of workable verification
procedures, that they themselves could
with impunity continue their present
behavior. They would in that cir-
cumstance have achieved their political
objectives of protecting themselves
against the consequences of their actions
while ensuring themselves the ability to
continue destabilizing their neighbors.

The difference between the two posi-
tions is the difference— to quote Pulitzer
Prize-winning journalist Shirley Chris-
tian—between "real policy and applause
lines." That is why ending our assistance
would force Central Americans to choose

WESTERN HEMISPHERE

between dictatorship and communism.
Our assistance is creating a practical
choice between those polar extremes.

• It is helping El Salvador build a
democrat

• It is helping Costa Rica and Hon-
duras to resist Nicaraguan pressures; and

• It is keeping alive the possibility
that Central America's problems can
ultimately be solved through negotiations.

We know what the standards are.
There are benchmarks along the way.
And we must all keep careful track, in ef-
fect, "conditioning" our attitudes and ac-
tions on what is actually happening in
Central America. We are looking for
tangible evidence— that El Salvador and
Honduras are continuing to develop more
democratic polities; that Nicaragua and
Guatemala are taking credible steps
toward fair elections; and that democratic
governments are able to protect
themselves against the antidemocratic
terror of the far left and the far right.

We can, with some precision, envision
a better future for the people of Central
America. We cannot and should not ex-
pect these countries to "Americanize"
themselves in our image. To be effective,
our policies must build on directions that
those countries find in their own national
interests. That is happening in Costa
Rica, Honduras, and, increasingly, El
Salvador, where events are
demonstrating that a democratic vision is
attainable. It must also be attained in
Nicaragua and Guatemala. It would be
wrong both morally and strategically not
to use our resources now to help them
move toward that future.

Visit of Dominican Republic President

'The U.S. Government Printing Office
(GPO) offers for sale the Report of the Na-
tional Bipartisan Commission for Central
Amenrn (132 pp.) and the Report of the Na-
tional Bipartisan Communion for Central
America— Appendix (832 pp.). Please contact
GPO for availability and prices:

Superintendent of Documents
U.S. Government Printing Office
Washington, D.C. 20402

TEL: (202) 783-3238 ■

President Salvador Jorge Blanco of
the Dominican Republic made a state
visit to the United States April 9-U,
1984. While in Washington, D.C,
April 9-12, he met with President
Reagan and other government officials.

Following are remarks made by the g
two Presidents at the arrival ceremony
and a White House statement.

ARRIVAL CEREMONY,
APR. 10. 19841

President Reagan

President and Mrs. Jorge Blanco, it's in-
deed an honor for me to welcome you,
the first President of your country to
make a state visit to the United States.
This is a special visit. The people of our
countries are both friends and
neighbors, and we're pleased to have
this opportunity to express our good will
to neighbors who reflect the same love
of liberty in which we take such pride.

The Dominican Republic today
shines as a beacon of freedom-loving
people everywhere. Your people have
shown the spirit, courage, and
perseverance necessary to build, in your
words, "a true functional democracy in
the Caribbean." Democracy, as all free
people have found, is not the easiest
path, but it is the best one. It is the way
most consistent with the spirit of the
New World, with the values of which all
Americans, from one end of the
hemisphere to the other, can claim as
their birthright.

As such, it is fitting that the
Dominican Republic, with its stability
and political liberty, now shows others
the way. Your nation, after all, was the
beachhead of Western civilization in the
New World. Christopher Columbus, the
great discoverer, landed on your shores
during his first voyage of exploration. In
your country still stands the first
cathedral of America, built in 1540. The
hopes and dreams of all the Americans
once focused on those hardy souls who
left the Old World and entered the New
through the doorway of Santo Domingo.

Today, as you strive to increase the
opportunity of all your citizens, you
follow in the spirit of those who came
before you. You face many challenges in
invigorating your economy and improv-
ing the standard of living of your people.
Yet even in the days of Columbus, the
magnificent beauty and vast potential of
your land were evident. In early 1493

Columbus wrote, "In that island ... we
named Espanola, there are mountains of
very great size and beauty, vast plains,
groves, and very fruitful fields. . . . The
convenience and excellence of the har-
bors in this island and the abundance of
the rivers . . . surpass anything that
would be believed by one who had not
seen it." That beauty and that potential
still remain. Coupled now with freedom,
your people have every reason to expect
that great things can be accomplished.

President Jorge Blanco, it is pro-
pitious that your visit coincides with Par
American Week, a time when we have
for the last 53 years celebrated the ties
between the peoples of the Western
Hemisphere. The people of the United
States place great value on the special
ties that we have with friends close to
home. And while the progress of any
country depends most heavily on the
freedom, the hard work, and the in-
genuity of its own people and govern-
ment, the United States is committed to
healthy cooperation with our Caribbean
Basin neighbors for the betterment of al
our peoples.

Combined with your own domestic
reforms, which we heartily applaud, the
trade and commerce unleashed by the
Caribbean Basin Initiative should bring
vast new opportunities to Dominicans
and to other Caribbean people. Your
country and some two dozen others will
now have for most of your products vir-
tually unrestricted duty-free entry until
1996 into the world's largest market.
Never before has the United States or
any other nation offered one-way free
trade to any regional group of countries.
It's a revolutionary step based on the
conviction that enterprise, investment,
and job creation will elevate the quality

Department of State Bulletin

WESTERN HEMISPHERE

' life while preserving the freedom and
dependence so cherished by both our
joples.
There is a Caribbean country on a
nuch different path. Instead of
;onomic freedom, it imposes heavy-
inded controls, denying for people, for
cample, the right of private ownership
|nd the right to organize independent
Lions. Instead of seeking mutual
Lspect and friendly commerce with its
leighbors, it exports violence and
latred. Instead of enjoying democratic
Joerties as are guaranteed in the
lominican Republic and most other
laribbean countries, its people are
lenied freedom of the press, speech, and
|;ligion. This tyranny has brought little
lope for economic progress, providing
Is people only shortages and foodlines.
luba is now dependent on a faraway
i >talitarian power without whose sub-
I dy its dictatorial government could not
report aggression or, indeed, survive.

Such serfdom and bowing to the in-
! crests of faraway masters is not con-
i. stent with the legacy of the people of
lis hemisphere. Our history is that of
ireaking away from such tutelage, and
I this all Americans have a common vi-
fi on. Your proud independence and the
I Dntinuing strength of democracy in the
I 'ominican Republic is a tremendous in-
I Diration here and to other people in the
| emisphere who are now battling to
| stablish their own democracies.

President Jorge Blanco, we in the
fnited States are fully aware that the
\ uccess of democratic institutions in
' our country is due to the good will and
t trenuous efforts of individuals like
ourself. You and your fellow coun-
: -ymen have our respect. As we work to

uild a more prosperous and happy
: jture, let us continue to open the doors
! f commerce and social interaction be-
|i ween our peoples.

In less than a decade we will be
i elebrating the 500th anniversary of a
3 istory-shattering event— Columbus'
irst great voyage of discovery. We look
orward to commemorating this, one of
nankind's greatest leaps, with the free
ieople of the Dominican Republic.

Pedro Henriquez Ureria, a renowned
iterary figure as well as a great
Dominican patriot, once wrote, "Words
ire like empty sacks. One must fill them
vith true human feeling." Well, I hope
;oday that you can sense the feeling, the
warmth, and admiration behind these
words of welcome. President and Mrs.
lorge Blanco, we're proud to have you
isiting with us.

President Jorge Blanco2

I am very pleased with this state visit,
made at your invitation and which
begins at the doorstep of the majestic
White House, which represents and sym-
bolizes the prestigious image of the
United States all over the world.

Since the Pilgrims arrived on the
shores of Massachusetts in search of a
safe haven in order to freely exercise
their religious and political ideas;
through the heroic struggles which
culminated in independence and the
establishment of the first democracy in
the Americas; and then on the eman-
cipation of the slaves proclaimed by the
eminent Abraham Lincoln, your people
have been and are a model for men who
join together in support of the eternal
ideals of human freedom and dignity.
These common efforts have created the
great melting pot of races and cultures
which is the United States of America.
As President and as jurist, I must
recall with admiration the important
documents which sustain the institu-
tional history of the great American peo-
ple, and which have established land-
marks in the upward climb of
humanity— the Mayflower Compact, the
Declaration of Independence, the Bill of
Rights, Lincoln's Gettysburg Address,
the Proclamation of the Four Freedoms
by Roosevelt, among many others, have
been and shall always be the most
outstanding example of this nation's con-
tribution to equality, democracy, and
social progress.

We represent a Dominican
democracy which is nourished, among
other sources, by the old teachings
which came precisely from this great na-
tion when it proclaimed its independence
on the Fourth of July of 1776. Since
that time, freedom has had its most im-
mediate origin on these American lands.
In the Dominican Republic, we have
always fought for freedom, and our re-
cent history increasingly has enhanced
this struggle, which is the mainstay of
our democracy, playing a vital role
within the inter- American system, whose
principles have been incorporated into
the functional charter of our Organiza-
tion of American States.

I am particularly grateful, for the
reference you made to my political role
of responsibility for the destinies of my
country, and of the difficult task that I
face in strengthening our democracy,
while at the same time facing the dire
effects of an international economic
crisis which has dealt harsh blows to the
weak economies and fragile political in-
stitutions of developing countries. And I

want to express my appreciation for the
Caribbean Basin Initiative, which has
opened new possibilities for the develop-
ment of our countries in the Caribbean.

We are pleased with the certainty
that our efforts will always receive the
encouragement and cooperation of
friendly peoples, particularly the people
of this great nation which never falters
in its resolve to provide necessary and
important solidarity.

I accept your words of praise toward
me as a recognition of the values of the
Dominican people, firmly resolved to
enrich its political democracy with
economic and social development and to
strengthen peace throughout the
hemisphere. I hope that our visit will
serve to strengthen even more the firm
bonds of friendship and of mutual
cooperation between our governments
and between our peoples.

And now I would hope that our visit
will be able to provide us, a visit which
we are making at your kind invitation,
with a way to increase even more the
very strong bonds of friendship that
exist between your people and mine.

WHITE HOUSE STATEMENT,
APR. 15, 19843

President Salvador Jorge Blanco of the
Dominican Republic this week concluded
a highly successful state visit to the
United States.

In his discussion with President
Reagan and senior American officials,
President Jorge and his delegation
showed once again that the Dominican
Republic is an outstanding example of a
people and leadership committed to
democracy and to seeking solutions to
social and economic problems through
democratic means. President Reagan
praised President Jorge for his skillful
and courageous leadership in a time of
serious economic difficulties and for his
role in promoting solidarity among the
Caribbean Basin nations.

President Reagan expressed his
strong confidence in the economic poten-
tial of the Dominican Republic. Among
the first countries to be designated for
participation in the Caribbean Basin Ini-
tiative (CBI), the Dominican Republic's
proximity to the United States, its in-
stalled industrial capacity, and agricul-
tural potential make it one of the coun-
tries most likely to benefit from the
CBI's trade and investment incentives.

President Jorge's announcement
during the course of his visit, of the con-
clusion of an agreement with the Inter-
national Monetary Fund (IMF) on

\ugust 1984

TREATIES

measures to resolve the Dominican
Republic's economic problems further
bolsters confidence in his government's
economic program and prospects for the
island nation's economic recovery. The
agreement is the second President Jorge
has negotiated with the IMF since tak-
ing office in 1982.

Reflecting the U.S. Government's
confidence in its democratic neighbor,
President Reagan informed President
Jorge that U.S. assistance to the
Dominican Republic will be increased
during this fiscal year which ends
September 30, 1984. Furthermore, as a
result of the meetings between the two
Presidents, the U.S. Government and
the Dominican Government have already
begun discussions regarding additional
cooperation during the current period of
economic recovery.

President Reagan told his guest that
the United States is proud to have the
Dominican Republic as a close friend.
Wishing the departing President every
good fortune. President Reagan stressed
his confidence in the future of the
Dominican Republic and its enlightened
and capable leadership.

'Made on the South Lawn of the White
House where President Jorge Blanco was ac-
corded a formal welcome with full military
honors (text from Weekly Compilation of
Presidential Documents of Apr. 16. 1984).

2President Jorge Blanco spoke in
Spanish, and his remarks were translated by
an interpreter.

3Made by the principal deputy press
secretary to the President (text from Weekly
Compilation of Presidential Documents of
Apr. S.',, 1984). ■

Current Actions

MULTILATERAL

Aviation

Convention for the suppression of unlawful
seizure of aircraft. Done at The Hague Dec.
170. Entered into force Oct. 14, 1971.
i 192.

ntion for the suppression of unlawful
' the safety of civil aviation. Done
at Montreal Se] I Entered into

173. TIAS '.

Monaco, June 3, 1983;
Bahri

ol relating to an amendment (Art. 3

' 1984. Enters
ch the I02d

is dep< i

Commodities— Common Fund

Agreement establishing the Common Fund
for Commodities, with schedules. Done at
Geneva June 27, 1980.2
Ratification deposited: Chad, June 6, 1984.

Conservation

Convention on international trade in en-
dangered species of wild fauna and flora,
with appendices. Done at Washington Mar. 3,
1983. Entered into force July 1, 1975. TIAS
8249.
Ratification deposited: Netherlands, Apr. 19,

1984.

Amendment to the convention of Mar. 3,
1973 on international trade in endangered
species of wild fauna and flora (TIAS 8249).
Adopted at Bonn June 22, 1979.2
Acceptance deposited: Austria, Mar. 16,
1984.

Cultural Relations— UNESCO

Agreement on the importation of educational,
scientific, and cultural materials; and pro-
tocol. Done at Lake Success Nov. 22, 1950.
Entered into force May 21, 1952; for the U.S.
Nov. 2, 1966 (TIAS 6129).

Protocol to the agreement on the importation

of educational, scientific, and cultural

materials of Nov. 22, 1950 (TIAS 6129).

Adopted at Nairobi Nov. 26, 1976. Entered

into force Jan. 2, 1982.3

Accession deposited: Portugal, June 11,

1984.

Customs

Customs convention on containers, 1972, with

annexes and protocol. Done at Geneva

Dec. 2, 1972. Entered into force Dec. 6,

1975.3

Accession deposited: Cuba, June 8, 1984.

Genocide

Convention on the prevention and punish-
ment of the crime of genocide. Done at Paris
Dec. 9, 1948. Entered into force Jan. 12,
1951.3
Accession deposited: Togo, May 24, 1984.

Human Rights

International convenant on civil and political
rights. Done at New York Dec. 16, 1966.
Entered into force Mar. 23, 1976.3

International convenant on economic, social,

and cultural rights. Done at New York

Dec. 16, 1966. Entered into force Jan. 3,

1976.3

Accession deposited: Togo, May 24, 1984.

Law

Statute of The Hague conference on private
international law. Done at The Hague
Oct. 9 31, 1951. Entered into force July 15,
for the U.S. Oct. 15, 1964. TIAS 5710.
ptance deposited: Poland, May 29, 1984.

Load Lines

International convention on load lines, 1966.
Done at London Apr. 5, 1966. Entered into
force July 21, 1968. TIAS 6331, 6629, 6720.

Accession deposited: United Arab Emirates,
Dec. 15, 1983.

Amendments to the international conventior
on load lines, 1966 (TIAS 6331, 6629, 6720).
Adopted at London Nov. 15, 1979.2
Acceptances deposited: Bulgaria Nov. 2,
1983; Canada, June 2, 1983.

Amendments to the international conventior
on load lines, 1966 (TIAS 6331, 6629, 6720).
Adopted at London Nov. 17, 1983. Enters ii
to force 12 months after the date on which
amendments are accepted by two-thirds of
the Contracting Governments, except for
those which, before amendments come into
force, make a declaration that they do not a
cept the amendments.

Marine Pollution

Convention on the prevention of marine
pollution by dumping of wastes and other
matter, with annexes. Done at London, Mex
ico City, Moscow, and Washington Dec. 29,
1972. Entered into force Aug. 30, 1975.
TIAS 8165.

Notification of succession: Solomon Islands,
Mar. 20, 1984.

Maritime Matters

International convention on maritime searcl
and rescue, 1979, with annex. Done at Ham
burg Apr. 27, 1979.2
Accession? deposited: Australia. Nov. 7,
1983"; Barbados, July 25, 1983.

Narcotic Drugs

Protocol amending the single convention on

narcotic drugs, 1961 (TIAS 6298). Done at

Geneva Mar. 25, 1972. Entered into force

Aug. 8, 1975. TIAS 8118.

Ratification deposited: Belgium, June 13,

1984.

Patents

Patents cooperation treaty, with regulation:
Done at Washington June 19, 1970. Entere>
into force Jan. 24, 1978, with the exception
of Chapter II for the U.S. TIAS 8733.
Accession deposited: Korea, Republic of,
May 10, 1984.

Patents — Microorganisms

Amendment to the Budapest treaty of
Dec. 31, 1977, on the international recogni-
tion of the deposit of microorganisms for th
purposes of patent procedure (TIAS 9768).
Adopted bv the Assembly of the Budapest
Union Sept. 26, 1980.
Entered into force: May 24, 1984.

Red Cross

Geneva convention for the amelioration of t
condition of the wounded and sick in armed
forces in the field. Done at Geneva Aug. 12.
1949. Entered into force Oct. 21, 1950; for
the U.S. Feb. 2, 1956. TIAS 3362.

Geneva convention for the amelioration of t
condition of the wounded, sick, and ship-
wrecked members of armed forces at sea.

Department of State Bulleti

ne at Geneva Aug. 12, 1949. Entered into
ce Oct. 21, 1950; for the U.S. Feb. 2,
56. TIAS 3363.

neva convention relative to the treatment
prisoners of war. Done at Geneva Aug. 12,
49. Entered into force Oct. 21, 1950; for
> U.S. Feb. 2, 1956. TIAS 3364.

neva convention relative to the protection
civilian persons in time of war. Done at
neva Aug. 12, 1949. Entered into force
t. 21, 1950; for the U.S. Feb. 2, 1956.
AS 3365.
cession deposited: Cape Verde, May 11,

TREATIES

84.

otocol additional to the Geneva conventions
Aug. 12, 1949, and relating to the protect-
j of victims of international armed conflicts
otocol I), with annexes. Done at Geneva
ne 8, 1977. Entered into force
c 7, 1978.3

otocol additional to the Geneva conventions
Aug. 12, 1949, and relating to the protec-
n of victims of noninternational armed con-
;ts (Protocol II). Done at Geneva June 8,
77. Entered into force Dec. 7, 1978.3
cessions deposited: Cameroon Mar. 16,

84; Oman, Mar. 29, 1984.

lC ibber
cernational natural rubber agreement,
79. Done at Geneva Oct. 6, 1979. Entered
.o force Apr. 15, 1982. TIAS 10379.
cession deposited: Greece, June 5, 1984.

ade

freement on implementation of article VII
the General Agreement on Tariffs and
ade [GATT], and protocol (customs valua
■»n). Done at Geneva Apr. 12, 1979 and
>v. 1, 1979. Entered into force Jan. 1,
81. TIAS 10402.
rii itification deposited: Czechoslovakia,

fl ly 28, 1984.

•rangement regarding bovine meat. Done at
•neva Apr. 12, 1979. Entered into force
n. 1, 1980. TIAS 9701.
:ceptance deposited: Colombia, June 4,

84.

VIDO

institution of the United Nations Industrial
ivelopment Organization, with annexes,
iopted at Vienna Apr. 8, 1979.2
itification deposited: Portugal, May 21,

'84.

Tieat

>83 Protocol for the further extension of the
heat trade convention 1971 (TIAS 7144).
one at Washington Apr. 4, 1983. Entered
to force July 1, 1983.
atification deposited: Luxembourg, June 26,

)84.

ccession deposited: Tunisia, June 28, 1984.

1983 protocol for the further extension of the
food aid convention, 1980 (TIAS 10015).
Done at Washington Apr. 4, 1983. Entered
into force July 1, 1983.
Ratification deposited: Luxembourg, June 26,

1984.

Women

Convention on the elimination of all forms of

discrimination against women. Adopted at

New York Dec. 18, 1979. Entered into force

Sept. 3, 1981. 3

Accession deposited: Yemen (Aden), May 30,

1984.

World Health Organization

Constitution of the World Health Organiza-
tion. Done at New York July 22, 1946.
Entered into force Apr. 7, 1948. TIAS 1808.
Acceptance deposited: Cook Islands, May 9,
1984.

BILATERAL

Barbados

Agreement for the furnishing of commodities
and services in connection with the
peacekeeping force for Grenada. Effected by
exchange of notes at Bridgetown Nov. 25,
1983 and Jan. 12, 1984. Entered into force
Jan. 12, 1984.

Belgium

Agreement on social security, with final pro-
tocol. Signed at Washington Feb. 19, 1982.

Additional protocol to the agreement on
social security. Signed at Brussels Nov. 23,
1982.

Administrative agreement for the implemen-
tation of the agreement on social security.
Signed at Brussels Nov. 23, 1982.
Entered into force: July 1, 1984.

Belize

Arrangement relating to radio communica-
tions between amateur stations on behalf of
third parties. Effected by exchange of notes
at Belmopan and Belize May 3 and 23, 1984.
Entered into force June 22, 1984.

Brazil

Memorandum of understanding concerning
the Landsat system. Signed at Brasilia
May 8, 1984. Entered into force May 8,
1984.

Canada

Agreement with respect to social security.
Signed at Ottawa Mar. 11, 1981.

Administrative arrangement for the im-
plementation of the agreement on social
security. Signed at Washington May 22,
1981.

Supplementary agreement amending the
agreement of Mar. 11, 1981 and the ad-
ministrative arrangement of May 22, 1981
with respect to social security. Signed at
Ottawa May 10, 1983.

Understanding with the Government of

Quebec on social security, with administrative

arrangement. Signed at Quebec Mar. 30,

1983.

Entered into force: Aug. 1, 1984.

Agreement for the establishment, operation,
and maintenance of two Loran-C chains for
the Canadian east coast and the Labrador
Sea, with annex. Effected by exchange of
notes at Ottawa Mar. 30, and May 3, 1984.
Entered into force May 3, 1984.
Supersedes agreement of Sept. 16, 1964
(TIAS 5657).

Agreement on interpretation of Art. III(lKa)
of the air transport agreement of Jan. 17,
1966, as amended (TIAS 5972, 7824, 10258).
Effected by exchange of letters at
Washington May 4, 1984. Entered into force
May 4, 1984.

Agreement amending the agreement of
Jan. 17, 1966 on air transport, as amended
(TIAS 5972, 7824, 10258), with related letter.
Effected by exchange of letters at Ottawa
May 24, 1984. Entered into force May 24,
1984.

Costa Rica

Agreement regarding the consolidation and
rescheduling of certain debts owed to,
guaranteed or ensured by the U.S. Govern-
ment and its agencies, with annexes. Signed
at Washington May 18, 1984. Entered into
force June 22, 1984.

Denmark

Agreement concerning Faroese fishing in
fisheries off the coasts of the U.S., with an-
nex and agreed minute. Signed at Washing-
ton June 11, 1984. Enters into force upon
date agreed upon by exchange of notes
following completion of internal procedures
of both parties.

Dominica

Agreement for the furnishing of commodities
and services in connection with the
peacekeeping force for Grenada. Effected by
exchange of notes at Bridgetown and Roseau
Nov. 25, 1983 and Jan. 13, 1984. Entered
into force Jan. 13, 1984.

Dominican Republic

Agreement amending the agreement of
Jan. 13, 1984, for the sale of agricultural
commodities. Signed at Santo Domingo
May 21, 1984. Entered into force May 21,
1984.

Egypt

Agreement amending the agreement of
Jan. 23, 1984, for the sale of agricultural
commodities. Effected by exchange of notes
at Cairo Apr. 19 and May 3, 1984. Entered
into force May 3, 1984.

Second agreement to the program grant
agreement of Aug. 29, 1982, as amended
(TIAS 10472; 10728), for decentralization sec-
tor support. Signed at Cairo May 14, 1984.
Entered into force May 14, 1984.

CHRONOLOGY

nd amendment ect grant

agreement of Aug. 29, 1979, as amended
(TIAS 9632; 10247), for Shoubra El-Kheima
thermal power plant. Signed at Cairo

14, 1984. Entered into force May 14,
1984.

Grenada

Agreement concerning the provision of train-
ing related to defense articles under the U.S.
Internationa! Military Education and Train
ing (IMET) Program. Effected by exchange
of notes at St. George's May 18 and 24, 1984.
Entered into force May 24, 1984.

Haiti

Agreement amending the agreement of Feb.
17 and May 4, 1984, relating to trade in cot-
ton, wool, and manmade fiber textiles and
textile products. Effected by exchange of
notes at Port-au-Prince May 21, 1984.
Entered into force May 21, 1984.

Agreement for sale of agricultural com-
modities, relating to agreement of June 8,
1979, with memorandum of understanding.
Signed at Port-au-Prince June 12, 1984.
Entered into force June 12, 1984.

International Labor Organization

Agreement relating to a procedure for U.S.
income tax reimbursement, with annex.
Signed at Washington May 18, 1984. Entered
into force Mav 18, 1984; effective Jan. 1,
1984.

Israel

Agreement on cooperation in energy research
and development, with annex. Signed at
Jerusalem June 3, 1984. Entered into force
June 3, 1984.

Japan

Memorandum of understanding with respect
to C.S. action on porcelain on-steel cookware
pursuant to GATT Art. XIX, with exchange
of letters. Signed at Geneva Sept. 6, 1983.
Entered into force Sept. 6, 1983; effective
Jan. 1, 1984.

Memorandum of understanding on the par-
ticipation of Japan in the ocean drilling pro-
gram. Signed at Washington and Tokyo
May 8 and 16, 1984. Entered into force
May 16, 1984.

Agreement amending the arrangement of
Aug. 17, 1979 concerning trade in cotton,
wool, and man-made fiber textiles, as exl md

nd amended with record of discussion
(TIAS 9564, L0484). Signed at Washington
May :■ f, re< Maj 25

1984.

Memorandui rstanding relating to

the protocol ,, l;»78. (TIAS 9

ling the international convention
high .seas fisheries of the North Pacific

385).
1 at Washington June Intered

June 5, l'.t-

Malawi

Agreement regarding the consolidation and
rescheduling of certain debts owed to,
guaranteed or ensured by the U.S. Govern-
ment and its agencies with annexes and im-
plementing agreement regarding repayments
due under AID loans, with annexes. Signed
at Lilongwe Apr. 30, 1984. Entered into
force June 11, 1984.

Mexico

Agreements amending the agreement of
Nov. 9, 1972, as amended (TIAS 7697, 9436,
9647, 10159, 10234, 10466, 10688, 109792),
concerning frequency modulation broad-
casting in the 88 to 108 MHz bands. Effected
by exchanges of notes of June 24, 1983; Jan.
10, Feb. 6, Feb. 27, Apr. 11, and June 12,
1984. Entered into force June 12, 1984.

NATO

Interim agreement relating to a procedure
for U.S. income tax reimbursement. Signed
at Brussels Feb. 29, 1984. Entered into force
Feb. 29, 1984.

St. Lucia

Agreement for the furnishing of commodities
and services in connection with the
peacekeeping force for Grenada. Effected by
exchange of notes at Bridgetown and
Casteries Nov. 23, 1983, and Jan. 13, 1984.
Entered into force Jan. 13, 1984.

St. Vincent and the Grenadines

Agreement for the furnishing of commodities
and services in connection with the
peacekeeping force for Grenada. Effected by
exchange of notes at Bridgetown and St. Vin-
cent Nov. 25, 1983. and Jan. 13, 1984.
Entered into force Jan. 13, 1984.

Spain

Memorandum of understanding with respect
to U.S. action on porcelain-on-steel cookware
pursuant to GATT Art. XIX, with exchange
of letters. Signed at Geneva July 29, 1983.
Entered into force July 29, 1983; effective
Jan. 1, 1984.

United Kingdom

Agreement amending Annex 2 of the air
services agreement of July 23, 1977, as
amended (TIAS 8641, 8965, 9722, 10059). Ef-
fected by exchange of notes at Washington
May 25, and 31, 1984. Entered into force
May 31, 1984.

Agreement amending the agreement of
July 3, 1958, as amended (TIAS 4078, 4267,
6659, 6861, 8014, 9688), for cooperation on
the uses of atomic energy for mutual defense
purposes. Signed at Washington June 5,
L984. Kilters into force on the date on which
each government shall have received from
the other written notification that it has com-
! with all statutory and constitutional re-
quirements.

Yugoslavia

Agreement amending agreement on Nov. 9,
1964 (TIAS 5689) for financing certain educs
tional exchange programs, with implementini
letters. Effected by exchange of letters at
Belgrade Jan. 20, 1984. Entered into force
Mar. 22, 1984.

'With reservation(s).
2Not in force.
3Not in force for the U.S.
4With statement. ■

June 1984

Note: The editors solicit readers' comment
on the value of the Bulletin 's monthly
chronologies. Unless a positive response is
received, the chronologies will be discon-
tinued.

June 1-10

President Reagan visits Ireland (June 1-4),
the U.K. (June 4-10), and joins other leaden
of the World War II Allies (June 6) in
ceremonies at Normandy commemorating th
40th anniversary of D-Day. June 7-9 he at-
tends the 10th annual economic summit of ii
dustrialized nations in London.

June 1

Secretary Shuitz heads the U.S. delegation t
the inauguration of Jose Napoleon Duarte as
President of El Salvador. He then goes to
Managua, Nicaragua, to meet with Sandinis'
government leader Ortega.

U.S. announces that it agrees to act as
the protecting power for the Israel Interest:
Section in Sri Lanka.

UN Security Council adopts a resolution
by a vote of 13-0, with two abstentions
(Nicaragua and Zimbabwe) condemning Irar
recent attacks on commercial ships in the
Persian Gulf and calls on all states to respe<
the right of free navigation.

Dutch Cabinet votes to defer final deci-
sion on deployment of U.S. cruise missiles u
til November 1985, and states that
deployments will occur if Soviets increase
their SS-20 deployments or an arms control
agreement is reached in the meantime. Stat
Department acting spokesman Romberg ex-
presses the U.S. disappointment at this deci
sion and adds that the other basing countrie
share the U.S. view that the 1979 NATO
decision for deployment should be im-
plemented on schedule.

June 2

North Korea withdraws from participation i
the Summer Olympics.

Iran formally rejects the UN Security
Council resolution of June 1, saying the
resolution has guaranteed the total insecurit
of the gulf and has, in effect, condoned
future Iraqi attacks on Iranian shipping.

Department of State Bulleti

CHRONOLOGY

ine 3

aqi jets hit a Turkish oil tanker near Kharg
I land.

Bolivia withdraws from participation in
i e Summer Olympics, citing financial dif-
ulties.

ine 4

ate Department acting spokesman
)mberg describes as "unhelpful to the
arch for a fair and final settlement to the
/prus problem" Turkish Cypriot settlement
an uninhabited area of Famgusta.

Tass reports that Andrei Sakharov and
3 wife "were in good health and not starv-
g." It describes reports abroad that Dr.
ikharov had died as "nothing more than in-
ntion."

Iran warns it will take firm reprisals in
sponse to the Iraqi attack on a Turkish oil
nker in the Persian Gulf and criticizes
veral gulf states for aiding Iraq and not re-
aining neutral.

State Department releases its 16th semi-
nual report on the implementation of the
slsinki Final Act covering the period
n.-Mar. 1984.

me 5

mdi Arabia's Defense Ministry announces
at their F-15 aircraft shot down an uniden-
'ied aircraft which intruded into Saudi
-space.

me 6-27

iO holds its annual conference in Geneva.
; the opening session Anna-Greta Leijon
weden) is elected President.

me 6

•ime Ministers of Greece, Sweden, and
nland call on the U.S. and the Soviet Union
hold a summit in order to break the im-
isse over arms control negotiations.
South African Prime Minister Botha
i ates that his government will withdraw
• om Namibia if one of the five members of
e Western contact group will take over
sponsibilities there. SWAPO and Canada
ject the idea. U.S. says any plan should be
ised only on UN resolutions. State Depart-
ent acting spokesman Romberg says UN
esolution 435 "is the internationally ac-
pted basis for a settement of the Namibia
sue."

ane 7-9

he 10th annual summit of the industrialized
itions is held in London. Leaders attending
•e Prime Minister Trudeau (Canada), Presi-
snt Mitterrand (France), Chancellor Kohl
Vest Germany), Prime Minister Craxi
taly), Prime Minister Nakasone (Japan),
rime Minister Thatcher (U.K.), President
eagan (U.S.), and Gaston Thorn, President
f the EC.

Summit participants issue a Declaration
n Democratic Values (June 8) affirming their
)mmitment to democracy, freedom, and the
;lose partnership" of the seven nations and
ie European Communities. The declaration
Iso states the leaders' position against the
se of force to settle disputes.

On June 9, the leaders issue a final com-
munique emphasizing their pledge to ease the
burden of Third World countries to repay
debts and to continue their policies against
rising inflation and interest rates. Par-
ticipants agree to consult other GATT
members on the possibility of launching a
new round of multilateral trade negotiations.
The leaders also issue three political state-
ments regarding East-West relations, ter-
rorism, and the Iran-Iraq conflict. President
Reagan invites countries represented at the
economic summit to participate in building a
permanently manned space station as a sym-
bol of cooperation in the peaceful uses of
space.

June 7

The Inter-American Commission on Human
Rights issues a report saying that hundreds
of Miskito Indians were imprisoned by
Nicaragua's Sandinista government and some
were tortured.

Warsaw Pact negotiators at the MBFR
talks in Vienna have strongly criticized pro-
posals offered by NATO in Apr. to cut con-
ventional forces in central Europe.

During an official visit to Warsaw, Roma-
nian President Ceausescu says he is con-
cerned by deployment of missiles by the East
and West and calls for a renewal of the arms
talks. Polish leader Gen. Jaruzelski defends
the Soviet deployment in East Germany and
Czechoslovakia.

June 8

In an interview from London on the "Today
Show," Secretary Shultz says the Iran-Iraq
war is one conflict that hasn't become an
East- West issue. He adds that the U.S. and
Soviet Union want international waters in the
Persian Gulf area to remain open.

Soviet Foreign Minister Gromyko and
Iranian Director General of the Foreign
Ministry Sayyed Mohammed Sadr meet to
discuss preventing the Iran-Iraq war from
reaching the point where military assistance
from the U.S. or other nations may be re-
quested by Arab oil-producing countries.

Senate votes to cut $4.4 million from
funds for construction of two military bases
in Honduras.

The Granadero I military exercise in Hon-
duras, involving U.S., Honduran, and
Salvadoran troops, ends.

State Department acting spokesman
Romberg urges the Soviet Union to allow in-
dependent observers to have direct contact
with the Sakharovs.

The National Academy of Sciences, con-
cerned about the situation of Andrei
Sakharov, announces it is postponing talks
over a scientific cooperation agreement with
its Soviet counterparts.

June 9-27

Chinese Defense Minister Zhang Aiping
makes a working visit to the United States.
While in Washington, D.C. (June 11, 12), he
meets with President Reagan and Secretaries
Shultz and Weinberger.

June 9

Lebanese President Gemayel and Prime
Minister Karami meet with UN Secretary
General Perez de Cuellar.

June 10

A Kuwaiti supertanker, Kazimah, is hit by a
rocket fired from an unidentified plane in the
southern Persian Gulf. The Kazimah, the
third Kuwaiti tanker to be hit in the gulf con-
flict, is outside the proclaimed war zone.
Iran and Iraq agree to UN Secretary
General Perez de Cuellar's request to cease
attacks on civilian population centers.

While on a European tour, South African
Prime Minister Botha meets with Assistant
Secretary Crocker in Rome to discuss South-
west Africa issues.

Underground Solidarity's second leading
official, Bogdan Lis, is arrested by the
"Gdansk security service." Lis had been in
the underground since Dec. 1981 when mar-
tial law was imposed in Poland.

June 11

Iraq accuses Iran of shelling three Iraqi cities
hours before the ban on air strikes against
civilian areas becomes effective. Iraqi forces
stop their attacks on Iranian towns before
the deadline. Iraq reemphasizes that the
agreed ban will not halt Iraqi blockage of
Kharg Island.

Soviet President Chernenko calls on the
U.S. to begin immediate negotiations on ban-
ning ASAT and other space weapons.
Chernenko says the Soviets are convinced
that a freeze on ASAT weapons tests can be
verified. State Department acting spokesman
Romberg says the U.S. is ready to informally
discuss the issue, but sees important verifica-
tion difficulties.

Some 90 people are killed and over 300
are wounded in renewed fighting between
Lebanese factions in Beirut.

The Soviet Union denies that U.S. Consul
Ronald A. Harms was beaten up outside a
Leningrad restaurant on Apr. 17. TASS
reports the alleged attack is a U.S. Govern-
ment fabrication to divert attention from the
Soviet's accusation of poor security at the
Summer Olympics.

Shortly after meeting with South African
Prime Minister Botha and Foreign Minister
Botha in Rome, Pope John Paul II issues a
statement condemning South Africa's apart-
heid policy.

June 12-14

Ambassador Fields, U.S. representative to
the Conference on Disarmanent, attends the
Munster chemical weapons destruction and
verification workshop held in West Germany.

June 12

Senators Baker and Percy urge President
Reagan to meet with Soviet President
Chernenko to discuss existing problems be-
tween the U.S. and Soviet Union despite the
suspension of arms control talks. In response,
White House spokesman Speakes says Presi-

\ugust1984

CHRONOLOGY

dent Reagan would be willing to meet with
Chemenko "without any precondition as to
venue or schedule" but careful preparation
would be needed to produce results.

Senate votes 61 to 28 to allow testing of
ASAT weapons with the provision that Presi-
dent Reagan affirms to Congress that he is
willing to negotiate arms control limitations
on such weapons with the Soviet Union.

Japanese Foreign Minister Abe proposes
that the U.S. and Soviet Union move toward
negotiating a nuclear test ban.

Foreign Ministers of the U.K., the
Netherlands. France, Italy, West Germany,
Belgium, and Luxembourg meet in Paris to
discuss ways of strengthening their political
role in NATO.

The Lebanese National Assembly voices
confidence in the Cabinet by a vote of 53 to
15 with three abstentions. The National
Assembly also supports a motion to allow the
Lebanese Cabinet to repeal or amend
previous government decrees for the next 9
months and votes to extend its own term of
office for 2 years.

The U.S. Government lifts a 7-year ban
on direct economic assistance to Mozambique.
The ban was imposed in 1977 in protest of
human rights violations.

June 13

In a statement before the House Foreign Af-
fairs Committee, Secretary Shultz proposes
broadening the laws which prosecute
Americans who illegally provide goods, such
as weapons, to terrorist supporters to include
prosecution of those who provide services as
well.

Pravda reports that Soviet President
Chernenko rejected a proposal by the leaders
of the industrialized democracies for renewed
talks on arms control and other issues.

The House votes 304 to 120 to support a
proposal to penalize employers for hiring il-
legal aliens. The immigration bill calls for
employers to be fined up to $2,000 for each
alien illegally hired.

UNIT A rebels in Angola capture 11
foreigners, including Portuguese, Colombians,
and perhaps some Americans, during fighting
with government troops.

June 14-17

Belgium, the Federal Republic of Germany,
France, Italy, Luxembourg, the Netherlands,
Denmark, Ireland, U.K., and Greece hold
elections for the European Parliament, the
434-seat directly elected assembly of the
European Communities.

June 14

State Department spokesman Hughes says
the U.S. Embassy in San Salvador confirmed
that the Salvadoran intelligence section of
the treasury police has been disbanded as
"part of President Duarte's move to improve
uman rights situation in El Salvador."
The Dutch Parliament votes 79 to 71 in
favor of a Cabinet decision on cruise missile
deployment.

State Department spokesman Hughes an-
nounces that a move to expel Israel from the
UPU, if successful, would cause the U.S. to
withdraw its delegation from the UPU Con-
gress, suspend its participation in UPU ac-
tivities, and withhold payments.

In a televised news conference, President
Reagan, appearing to relax conditions for
discussing issues of mutual interest, says he
would meet with Soviet President Chernenko
"any time."

The U.S. delegation refused to participate
in a debate on an arms race in space in the
UN Committee on Peaceful Uses of Outer
Space. U.S. representative Eskin says the
U.S. considers the Conference on Disarma-
ment as the proper forum for discussions of
this issue.

The U.S. International Trade Commission
unanimously rules that the U.S. copper in-
dustry has been seriously injured by imports.
USITC Commissioner Rohr says 1983 im-
ports exceeded the 1979 level by about 122%.
The major U.S. sources of copper imports are
Canada, Chile, Peru, Zaire, and Zambia.

The House votes 228 to 172 to allow tem-
porary foreign workers into the U.S. to
harvest perishable crops. The proposal will
allow aliens to move among different
employers for up to 11 months of seasonal
employment.

U.S. and Philippines military officials con-
clude a new defense plan at the annual
defense board meeting.

The UN Trusteeship Council, reporting to
the Security Council on the administration of
the Trust Territory of the Pacific, says that
recent votes for self-government by the
Federated States of Micronesia and the
Marshall Islands were the "free and fair ex-
pression" of the people.

Israeli military command reports a 2-hour
battle between Israeli soldiers and attackers
from behind Syrian lines. No casualties are
reported.

UN Secretary General Perez de Cuellar
says two teams of UN observers, established
to monitor the Iraq-Iran agreement of June
10, will be available by June 15 upon request
of either government.

June 15

Secretary Shultz and Soviet Ambassador
Dobrynin meet at the Department of State.

UN Security Council votes to keep the
UN peacekeeping forces in Cyprus for an ad-
ditional 6 months.

Canadian Prime Minister Trudeau steps
down as Liberal Party leader.

Treasury Department announces that the
U.S. will not extend a commitment to lend
$300 million to Argentina beyond the June 15
deadline. Argentina was unable to reach an
agreement of an adjustment program with
the IMF.

Iran proposes a halt to oil tanker attacks
in the Persian Gulf if Iraq agrees to stop its
raids, and says it would welcome a UN effort
in ban attacks on commercial shipping.

June 16-23

President J.R. Jayewardene of the
Democratic Socialist Republic of Sri Lanka
makes a state visit to the United States.

June 16

In a communique read over state television,
Iraq accuses Iran of violating their agree-
ment to halt attacks on civilian areas, claim-
ing Iran shelled an Iraqi border town injuring
one civilian and damaging two houses.

John Turner succeeds Prime Minister
Trudeau as Canada's Liberal Party leader.

June 17

Poland holds nationwide elections.

June 18

Nicaragua says it will send an Olympic team
to Los Angeles despite reports of economic
problems.

The following newly appointed am-
bassadors present their credentials to Presi-
dent Reagan: Claudio Antonio Volio Guardia
of Costa Rica; Richard Hendrik Fein of the
Netherlands; Klaus Jacobi of Switzerland;
Valentin Hernandez Acosta of Venezuela;
Hernan Felipe Errazuriz Correa of Chile; am
Luis Ernesto Marchand Stens of Peru.

June 19-22

Ambassador Shlaudeman continues consulta-
tions in support of the Contadora process in
visits to Honduras, El Salvador, Guatemala,
Costa Rica, and Panama.

June 19

State Department spokesman Hughes report
the U.S. "does not contemplate a sale" of
Stinger antiaircraft missiles to Kuwait "at
this time."

Senate votes 58 to 38 against a proposal
to phase out aid to Nicaraguan rebels.

A Salvadoran judge sentences five form<
national guardsmen to 30-year prison terms
each for the murders of four American
churchwomen in 1980.

Polish Government announces that a
voter turnout of less than 50% in the June 1
elections will require new elections to be hel
in 85 voting areas.

Defense Department announces the sale
of 12 C-130 military transport planes to
Taiwan.

June 20

State Department spokesman Hughes repori
that China has protested the U.S. sale of 12
C-130 military transport planes to Taiwan.
Hughes says the sale is "within the terms of
the August 17, 1982, communique" with
China on U.S. arms sales to Taiwan.

State Department spokesman Hughes
confirms reports that Saudi Arabia, with U.l
approval, has been passing to Kuwait, "on at
intermittent basis, relevant AWACS-derived
information."

Joao C. Baena Soares (Brazil) is sworn ii
as the sixth Secretary General of the
Organization of American States.

State Department spokesman Hughes
describes as "nonsense" the Defense Attache
article which alleges the KAL #007 flight,
shot down by the Soviets in 1983, was part <
a U.S. intelligence gathering operation.

U.S. and Israeli forces participate in join
medical evacuation exercises.

Department of State Bulleti

CHRONOLOGY

House approves an immigration bill to en-
■ce sanctions on employers hiring illegal
ens and legalize the status of aliens who
tered the U.S. illegally before 1982. The
te is 216 to 211. This most important im-
■gration legislation in over three decades
Ew goes to the House-Senate conference.

ne 21

nate Foreign Operations Subcommittee ap-
oves President Reagan's request for $117
llion in emergency military aid to El
Jvador in FY 1984 and an additional $132
llion for FY 1985.

NATO Secretary General Luns says the
sthod used for estimating NATO-Warsaw
ict forces has been changed to reflect a
lore realistic picture." The revised defini-
>n of forces focuses on those forces which
>uld be readily available in the event of con-
:t.

Senate rejects a proposal to withdraw
S. troops from Western Europe between
'87-90. The vote is 55 to 41.

ne 22

peeing to set up a process of foreign debt
nsultation, 11 Latin American nations,
;eting in Colombia, propose to establish a
oup to form a new world structure to
finance Third World debts.

The Department of State announces Laos
s accepted a U.S. donation of 5,000 metric
is of glutinous rice as emergency
distance in response to a food shortage
suiting from monsoon rains.

me 23

■banese Cabinet approves a security plan
- the Beirut area. Prime Minister Karami
ys the plan includes eliminating the "green
•e" that divides the city and opening
:irut's international airport and harbor.
Vietnam withdraws 3,000 troops from
impuchea. Kampuchean rebels, the U.S.,
lina, and ASEAN have dismissed earlier
nilar actions as a rotation of troops.

ne 24

cretary Shultz, in a speech before a con-
rence sponsored by the Jonathan Institute,
ges governments opposed to terrorism to
I link long, hard, and seriously about . . . ap-
opriate preventive or preemptive actions
ainst terrorist groups before they strike."

A Greek tanker carrying Iranian oil is at-
cked by Iraqi planes south of Kharg Island,
le tanker is slightly damaged; none of the
ew is injured.

1 ine 24-27

*|PA Administrator Ruckelshaus attends the
unilateral Conference on the Environment
Munich, West Germany, where he confirms
.S. commitment to reducing transboundary
r pollution.

ine 25-26

mbassador Shlaudeman meets with
icaraguan Vice Minister of Foreign Affairs
inoco in Manzanillo, Mexico.

June 25

Speaking before a conference sponsored by
the Jonathan Institute, Ambassador
Kirkpatrick says the Soviet Union is the
"principal supporter" of using terrorism as a
form of political action.

Senate votes 88 to 1 to discontinue aid
from an emergency spending bill for
Nicaraguan rebels.

Lord Carrington (U.K.) is sworn in as the
sixth Secretary General of NATO.

June 26

Eleven Soviet journalists arrive in
Washington, D.C., as part of a U.S. -Soviet
journalist exchange.

In a statement before the Senate Foreign
Relations Committee, Assistant Secretary
Abrams reaffirms U.S. opposition to govern-
ments' use of torture.

Angola withdraws from participation in
the Summer Olympics.

June 27

In remarks to U.S. -Soviet relations
specialists, President Reagan says he is work-
ing to improve economic, cultural, scientific,
and consular ties with the Soviet Union. Pro-
posals include opening a Consulate in Kiev
and a cooperative space mission with the
Soviets.

After meeting with Cuban President
Castro, Rev. Jesse Jackson, a Democrat
presidential candidate and civil rights leader,
announces the release from prison of 22 U.S.
citizens. State Department spokesman
Hughes says the U.S. is pleased this
humanitarian effort succeeded.

A Swiss-owned, Liberian-registered
supertanker, carrying Iranian oil, is hit by an
Exocet missile fired by Iraqi warplanes.
Eight crewmen die, and three are injured.

An ILO commission of inquiry concludes
the Polish Government violated a treaty to
guarantee trade union freedom. The commis-
sion urges Poland to release jailed union
members and allow independent unions.

State Department spokesman Hughes
terms the Soviet journalists' cancellation to
interview Secretary Shultz as a "rebuff to
U.S. efforts for a dialogue with the Soviet
Union.

Nicaraguan rebel leader Adolfo Calero
Portocarrero says despite lack of U.S. aid,
the rebels will continue fighting and will ob-
tain aid from other sources.

Sierra Leone deports eight West Ger-
mans and Americans for arms smuggling.

June 28

Rev. Jesse Jackson returns to the U.S. with
26 Cuban and 22 U.S. prisoners released by
Cuban President Castro. Six of the
Americans, charged with offenses in the
U.S., are arrested upon arrival.

Secretary Shultz describes the Cuban
President's decision to release 26 Cuban
political prisoners in addition to the 22
Americans as a "propaganda victory." He
adds that despite this gesture, the Cuban
Government still supports armed subversion,
and the Administration is not softening its
policy toward Cuba.

TASS reports President Reagan's call for
improved U.S. -Soviet relations in economic,
science, cultural, and consular affairs as a
campaign maneuver.

U.S. and Soviet Union extend for 10
years an agreement on economic, industrial,
and technical cooperation.

Mexican Government expresses concern
that proposed U.S. immigration changes
could "injure the human and labor rights of
Mexican workers" and pledges to "protect its
nationals" and demand respect for their
rights.

Israel and Syria exchange prisoners of
war. Israel returns approximately 290
soldiers and 20 civilians; Syria returns 3
soldiers and 3 diplomatic security guards.
The bodies of 72 Syrians and 5 Israelis were
also exchanged.

State Department acting spokesman
Romberg reports that ARENA leader
d'Aubuisson, meeting with Assistant
Secretary Motley on June 27, indicated his
support for El Salvador President Duarte's
democratic government.

Supreme Court upholds the U.S. Govern-
ment's authority to restrict travel by
Americans to Cuba.

In testimony before a joint session of the
Senate Foreign Relations Committee and
Senate Subcommittee on Energy, Nuclear
Proliferation, and Government Processes of
the Committee on Governmental Affairs,
ACDA Director Adelman says that the U.S.
strives to focus world attention on the
dangers of chemical weapons proliferation
and seeks a "complete and effective ban." He
adds that maintaining a deterrent capability
is necessary to safeguard Western interests
until a comprehensive treaty is concluded.

June 29

Soviet Union offers to begin talks with the
U.S. in September on banning space
weapons. It also calls for a moratorium on
the testing and deployment of space weapons
to be effective at the opening of such talks.
National Security Adviser McFarlane says
the U.S. will agree to discuss a verifiable and
effective limitation of ASAT weapons as well
as to discuss how to resume negotiations on
offensive nuclear forces.

The House of Representatives passes a
resolution (399 to 0) urging President Reagan
to strongly protest the Soviet's refusal to pro-
vide information on the Sakharovs. The
resolution also calls on the other 34 signatory
nations of the Helsinki Final Act to join the
protest.

Rev. Jesse Jackson briefs Under
Secretary Armacost on his visit to Cuba and
other Central American countries. He ex-
presses appreciation for the Administration's
quick processing of the Cuban political
prisoners and approving landing rights for
the Cubana airliner.

Israeli Navy reports sinking a "terrorist"
boat off a Lebanese island used as a guerrilla
training base.

ugust 1984

PRESS RELEASES

PUBLICATIONS

Argentina agrees to pay $225 million
from its n nelp pay off $350 million

in interest due June 30. Eleven American,
European, and Japanese banks give Argen-
tina a rthe balance of $125
million. The" banks also agree to a 90-day ex-
tension to repay $750 million due on June 15.

The Los Angeles Olympic Organizing
Committee announces that a record 141 coun-
tries will participate in the Summer Games.
Secretary General Perez de Cuellar,
in messages to Iran and Iraq, declares that
the June 10 agreement should not be used as
a cover for troop concentrations in civilian
areas, and he seeks assurances that chemical
weapons will not be used in the war.

June 30

John N. Turner is sworn in as Canada's 17th
Prime Minister.

Yuri Aleshin, a dancer with the Moscow
Philharmonic Classical Ballet, defects while in
Tokyo and asks the U.S. for asylum. ■

Department of State

Press releases may be obtained from the Of-
fice of Press Relations, Department of State,
Washington, D.C. 20520.

No. Date

145 6/4

146 6/7

*147 6/5

*148 6/8

•149 6/12

•150 6/12

•151 6/12
•152 6/13

•153 6 L3

154 6/13

•155 6/21
156 6/26

Subject

Foreign Relations of the
United States, 1952-1954,
Vol. XV: Korea; released
June 7.
Shultz: news conference in
Managua, Nicaragua,
June 1.
Shultz: interview on "Good
Morning, America," Lon-
don.
Shultz: interview on "Today

Show," London.
International Telegraph and
Telephone Consultative
Committee (CCITT)
meeting, study groups A
and B, July 9.
Integrated Services Digital
Network and CCITT joint
meeting, July 9.
CCITT meeting, July 10.
Shultz: remarks and ques-
tion-and-answer session
before the Overseas
Writers Club, June 12.
Program for the state visit
of President J.R.
Jayewardene of the
Democratic Socialist
Republic of Sri Lanka,
June 16-23.
Shultz: statement before the
House Foreign Affairs
mmittee.

ice in
>n, June 9.
Shull iiefore the

Jonathan Institute Second
Conference on Interna-
tional Terrorism, June 24.

Department of State

Free multiple copies may be obtained by
writing to the Office of Opinion Analysis and
Plans, Bureau of Public Affairs, Department
of State, Washington, D.C. 20520.

Secretary Shultz

Terrorism: The Challenge to the Democ-
racies, Jonathan Institute's Second Con-
ference on International Terrorism,
June 24, 1984 (Current Policy #589).

Terrorism: The Problem and the Challenges,
House Foreign Affairs Committee,
June 13, 1984 (Current Policy #586).

Arms Control

Arresting the Nuclear Genie, Kenneth L.
Adelman, ACDA Director, Mid-America
Committee, Chicago, May 2, 1984 (Cur-
rent Policy #582).

Unci \ S 1 ' I

U.S.-Japanese Trade (GIST, June 1984).
U.S.-China Educational and Cultural Ex-
changes (GIST, June 1984).

Economics

The Logic and Politics of the Next Trade
Round, Deputy Assistant Secretary
Lamb, World Trade Conference, Chicago,
April 25, 1984 (Current Policy #585).

The American Trade Deficit in Perspective,
U.S. Ambassador to the Federal Republic
of Germany Arthur F. Burns, Industrie-
Club, Dusseldorf, April 5, 1984 (Current
Policy #583).

Europe

The Atlantic Alliance and the American
National Interest, Ambassador
Kirkpatrick, National Committee on
American Foreign Policy, New York,
April 30, 1984 (Current Policy #581).

The Effect of European Public Opinion on
U.S. Foreign Policy, Assistant Secretary
Bennett, Education Committee, North
Atlantic Assembly, Luxembourg, May 24,
1984 (Current Policy #588).

Negotiating With the Soviets, Ambassador
Paul H. Nitze, head of the U.S. Delega-
tion to the intermediate-range nuclear
forces (INF) negotiations, Foreign Policy
Association, New York, June 1, 1984
(Current Policy #587).

General

Doctrine of Mural Equivalence, Ambassador
Kirkpatrick, Royal Institute for Interna-
tional Affairs. London, April 9, 1984
(Current Policy #580).

Pacific

The ANZUS Relationship: Alliance Manage-
ment, Assistant Secretary Wolfowitz,
Conference on the American Effect on
Australian Defense, Australian Studies
Center, Pennsylvania State University,
University Park, Pennsylvania, June 24,
1984 (Current Policy #592).

Science and Technology

The Role of Science and Technology in
Foreign Affairs, Assistant Secretary
Malone, Council of Scientific Society
Presidents, April 25, 1984 (Current
Policy #584). ■

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Vietnam (May 1984)

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mestic; $17.50, foreign. Single copy —
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Foreign Relations Volume Released

The Department of State on June 7,
1984, released Foreign Relations of the
United States, 1952-1954, Volume XV,
Korea. The volume presents almost
2,000 pages of previously highly
classified and unpublished documents on
the policy deliberations and diplomatic
negotiations which ended the Korean
war.

By 1952, America's first limited war
of the 20th century has become a
military stalemate. Approximately the
first 700 pages of the volume deal with
the Truman Administration's efforts to
resolve the last remaining issue prevent-
ing peace in Korea, the conflict with the
communists over voluntary return of
prisoners of war (POWs). Having made
the difficult decision in early 1952 not to
use force to repatriate captured Chinese
and North Korean prisoners, Truman
and his advisers faced an agonizing and
unsuccessful search for a formula to
resolve the POW deadlock. Casualties
continued on the battlefield, as
American and allied POWs languished in
communist POW camps. Truman was
unable to secure peace at Panmunjom,
at the United Nations, or through in-
direct diplomacy. Adding to the Presi-
dent's frustrations, were the increasingly
authoritarian methods used by the Presi-
dent of the Republic of Korea, Syngman
Rhee, against his elected political op-
ponents.

President Eisenhower came to office
committed to end the war. His Ad-
ministration considered very tentatively
the use of tactical atomic weapons if it
could not achieve peace at the
negotiating table. Secretary of State
John Foster Dulles passed the hint of
such a strategy to the People's Republic
of China. The new American determina-
tion, as well as other considerations,
moved the communists closer to de facto
acceptance of the American position on
the POW question. But President Rhee
believed the impending armistice would
mean the end of his dream of a unified
Korea and resisted it. The U.S. Govern-
ment successfully embarked on a
diplomatic campaign to obtain from
Rhee a promise not to obstruct the ar-
mistice.

Foreign Relations 1952-1954,
Volume XV, was prepared in the Office
of the Historian, Bureau of Public Af-
fairs, Department of State. Copies of
Volume XV (Department of State
Publication Nos. 9347 and 9348; GPO
Stock No. 044-000-02010-6) may be
purchased for $29.00 (domestic, postpaid)
from the Superintendent of Documents,
U.S. Government Printing Office,
Washington D.C. 20402. Checks or
money orders should be made payable to
the Superintendent of Documents. The
Foreign Relations series has been
published continuously since 1861 as the
official record of U.S. foreign policy.
The volume released June 7, which is
published in two parts, is the eighth of
16 volumes covering the years 1952-54.

Press release 145 of June 4, 1984.

° V

Belgium

1-1. 1. <,••—•••*

Cameroon

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June 198'

fDEX

jgust 1984

olume 84, No. 2089

ns Control

jotiating With the Soviets (Nitze) 34

ilear Arms Control and the NATO Alliance

(Rowny) 38

serving Freedom and Security (Dam) ... 44
sident's Visit to Ireland, the United King-
dom, and France (FitzGerald, Hillery,

Reagan) 7

2 President Bush Visits East and South
Asia and the Middle East (statements,

toasts, remarks) 25

II izil. The Role of Science and Technology in

Foreign Affairs (Malone) 71

liness
Near West: America and the Pacific

(Wallis) 50

el: Domestic Industry in a Global Market

(Wallis) 47

na. The Role of Science and Technology in

Foreign Affairs (Malone) 71

lgress

serving Freedom and Security (Dam) ... 44

rorism: The Problem and the Challenge

(Shultz) 29

1. Central American Policy at a Crossroads

(Motley) 77

!, Position on Jerusalem (Armacost) .... 62
>ta Rica. U.S. Central American Policy at a

Crossroads (Motley) 77

>rus. Cyprus: Reports of Turkish Cypriot
Settlement in Varosha (Department state-
ment) 53

lartment & Foreign Service. The Role of
Science and Technology in Foreign Affairs

t (Malone) 71
linican Republic. Visit of Dominican Re-
public President (Jorge Blanco, Reagan) 84
t Asia. The Near West: America and the
i Pacific (Wallis) 50

i momies

t ture Opportunities for U.S. -Latin American

Trade: The U.S. Perspective (Motley) . .74

II idon Economic Summit (Reagan, declara-

i tions, statement) 1

'J i Near West: America and the Pacific

- (Wallis) 50

i el: Domestic Industry in a Global Market

1 (Wallis) 47

1 Salvador. U.S. Central American Policy

0 at a Crossroads (Motley) 77

J rope

iltic Freedom Day, 1984 (proclamation) . .54
Jrlin's Status in European Parliament Elec-

| tions (joint response) 55

3 ctrine of Moral Equivalence (Kirkpatrick) 57

1 reign Assistance

J ctrine of Moral Equivalence (Kirkpatrick) 57
Ifugees: Overseas Aid and Domestic Admis-

I sions (Purcell) 66

lance. President's Visit to Ireland, the
[ United Kingdom, and France (FitzGerald,
I Hillery, Reagan) 7

rmanv Berlin's Status in European Parlia-
I ment Elections (joint response) 55

latemala U.S. Central American Policy at a
I Crossroads (Motley) 77

mduras U.S. Central American Policy at a

I Crossroads (Motley) 77

• aman Rights. Baltic Freedom Day, 1984

I (proclamation) 54

idia
lie Role of Science and Technology in Foreign

I Affairs (Malone) 71

Hce President Bush Visits East and South
I Asia and the Middle East (statements,
J toasts, remarks) 25

Indonesia. Vice President Bush Visits East
and South Asia and the Middle East
(statements, toasts, remarks) 25

Industrialized Democracies. London Eco-
nomic Summit (Reagan, declarations,
statement) 1

Iran. Iran-Iraq War (Sorzano, text of resolu-
tion) 73

Iraq. Iran-Iraq War (Sorzano, text of resolu-
tion) 73

Ireland. President's Visit to Ireland, the
United Kingdom, and France (FitzGerald,
Hillery, Reagan) 7

Israel. U.S. Position on Jerusalem
(Armacost) 62

Japan. Vice President Bush Visits East and
South Asia and the Middle East
(statements, toasts, remarks) 25

Nicaragua. U.S. Central American Policy at a
Crossroads (Motley) 77

North Atlantic Treaty Organization. Nuclear
Arms Control and the NATO Alliance
(Rowny) 38

Nuclear Policy. Nuclear Arms Control and
the NATO Alliance (Rowny) 38

Oceans. U.S. Policy in the Pacific Island
Region (Reagan) 63

Oman. Vice President Bush Visits East and
South Asia and the Middle East
(statements, toasts, remarks) 25

Pacific

The Near West: America and the Pacific
(Wallis) 50

U.S. Policy in the Pacific Island Region
(Reagan) 63

Pakistan. Vice President Bush Visits East and
South Asia and the Middle East (state-
ments, toasts, remarks) 25

Presidential Documents

Baltic Freedom Day, 1984 (proclamation) . .54

London Economic Summit (Reagan, declara-
tions, statement) 1

President's Visit to Ireland, the United King-
dom, and France (FitzGerald, Hillery,
Reagan) 7

U.S. Policy in the Pacific Island Region
(Reagan) 63

Visit of Dominican Republic President (Jorge
Blanco, Reagan) 84

Publications

Department of State 92

Foreign Relations Volume Released 93

GPO Subscriptions 92

Refugees

Refugees: Overseas Aid and Domestic Admis-
sions (Purcell) 66

Vice President Bush Visits East and South
Asia and the Middle East (statements,
toasts, remarks) 25

Science and Technology. East-West Relations
and Technology Transfer (Schneider) . . 68

The Role of Science and Technology in Foreign
Affairs (Malone) 71

Terrorism

Terrorism: The Challenge to the Democracies
(Shultz) 31

Terrorism: The Problem and the Challenge
(Shultz) 29

Trade

Future Opportunities for U.S.-Latin American
Trade: The U.S. Perspective (Motley) . .74

The Near West: America and the Pacific
(Wallis) 50

Steel: Domestic Industry in a Global Market
(Wallis) 47

Vice President Bush Visits East and South
Asia and the Middle East (statements,
toasts, remarks) 25

Treaties. Current Actions 86

U.S.S.R.

Baltic Freedom Day, 1984 (proclamation) . .54
Doctrine of Moral Equivalence (Kirkpatrick) 57
East-West Relations and Technology Transfer

(Schneider) 68

Negotiating With the Soviets (Nitze) 34

Nuclear Arms Control and the NATO Alliance

(Rowny) 38

Preserving Freedom and Security (Dam) ... 44
President's Visit to Ireland, the United King-
dom, and France (FitzGerald, Hillery,

Reagan) 7

The Role of Science and Technology in Foreign

Affairs (Malone) 71

Soviet Active Measures (Knepper) 53

United Kingdom. President's Visit to Ireland,
the United Kingdom, and France

(FitzGerald, Hillery, Reagan) 7

United Nations. Iran-Iraq War (Sorzano, text

of resolution) 73

Western Hemisphere

Doctrine of Moral Equivalence (Kirkpatrick) 57
Future Opportunities for U.S.-Latin American
Trade: The U.S. Perspective (Motley) . .74
President's Visit to Ireland, the United King-
dom, and France (FitzGerald, Hillery,
Reagan) 7

Name Index

Armacost, Michael H 62

Bush, Vice President 25

Dam, Kenneth W 44

FitzGerald, Garret 7

Hillery, Patrick J 7

Jorge Blanco, Salvador 84

Kirkpatrick, Jeane J 57

Knepper, William E 53

Malone, James L 71

Marks, Michael B 68

Motley, Langhorne A 74, 77

Nitze, Paul H 34

Purcell, James N., Jr 66

Reagan, President 1, 7, 54, 63, 84

Rowny, Edward L 38

Schneider. William Jr 68

Shultz, Secretary 29, 31

Sorzano, Jose S 73

Wallis, W. Allen 47, 50

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bulletin

ie Official Monthly Record of United States Foreign Police

ume 84 /Number 2090

September 1984

Cover: Secretary Shultz

Assistant Secretary for Human Rights and
Humanitarian Affairs Elliott Abrams

Department of State

bulletin

Volume 84 / Number 2090 / September 1984

GEORGE P. SHULTZ

Secretary of State

JOHN HUGHES

Assistant Secretary for Public Affair

PAUL E. AUERSWALD

Director,

Office of Public Communication

NORMAN HOWARD

Chief, Editorial Division

PHYLLIS A. YOUNG

Editor

SHARON R. LOTZ

Assistant Editor

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CONTENTS

The President

1 A Force for Freedom in the

Caribbean

2 News Conference of July 24

(Excerpts)

The Secretary

3 Asia-Pacific and the Future

7 Secretary Visits Asia; Attends

ASEAN and ANZUS Meetings
(Warren Cooper, William
Hoyden, Secretary Shultz, Text of
ANZUS Communique)

Human Rights

48 Extending Voluntary Departure

for El Salvadorans (Elliott
A brams)

49 Persecution and Restrictions of

Religion in Nicaragua (Elliott

Abrams)
51 Captive Nations Week, 1984

(Proclamation)
53 Human Rights in Cuba (Elliott

Abrams)
55 Human Rights Situation in Zaire

and South Africa (Elliott

Abrams)

Arms Control

Status of Conference on Disarm-
ament in Europe (President
Reagan)
Proposed Outer Space Negotia-
tions (White House Statements)

East Asia

25 The U.S.-China Trade Relation-
ship (Paul D. Wolfowitz)

Taking Stock of U.S. -Japan
Relations (Paul D. Wolfowitz)

U.S. -Asia Security: Economic and
Political Dimensions
(William A. Brown)

Economics

World Economic Prospects
(Allen W. Wallis)

The Bretton Wood Legacy: Its
Continuing Relevance
(Richard T. McCormack)

Europe

41 U.S.-Soviet Bilateral Relations

(President Reagan, White House
Fact Sheet)

42 U.S.-Soviet Consular Agreement

(Department Statement)

45 U.S.-Soviet Union Expand "Hot

Line" Agreement (President
Reagan, White House Fact
Sheet)

46 19th Report on Cyprus (Message

to the Congress)

Food

46 Food for Peace Day, 1984
(President Reagan,
Proclamation)

Pacific

60 The ANZUS Relationship:

Alliance Management (Paul D.
Wolfowitz)

Refugees

64 African Refugees Relief Day, 1984

(Proclamation)

South Asia

65 Visit of Sri Lankan President
(J. R. Jayewwrdene, President
Reagan)

Western Hemisphere

69 Review of Nicaragua's Commit-
ments to the OAS (J. William
Middendorf II)

71 Elections in Guatemala (White

House Statement)

72 President Meets With El

Salvador's President (White
House Statement)

73 Cuba as a Model and a Challenge

(Kenneth N. Skoug, Jr.)

Treaties

78 Current Actions

Chronology

80 July 1984

Press Releases

82 Department of State

Publications

82 Department of State

Index

THE PRESIDENT

democratic peoples do not stand
together, we certainly will be unable to
stand alone.

Just a few years ago, totalitarianism
was on the rise. But there's a new spirit
among democratic peoples. Prime
iMinister Adams described it, when he
said, "There is a community of interest
among democratic countries which can

transcend ethnicity and differences in
economic development." This spirit is a
powerful new force for freedom in the
world today.

What we do together, as a family of
free men and women will determine
what the future will be like for our
children. If we're strong enough to live
up to our shared values, the promise of

freedom and opportunity for the new
world will at long last be realized.

By working together, the free peo
of this hemisphere can make certain tl
the next century will indeed be our cei
tury, a democratic century.

'Text from White House press release;
opening and closing paragraphs are omitte-
here. ■

News Conference of July 24 (Excerpts)

Excerpts from President Reagan's
news conference of July J',, iu.sj,.1

Q. Mr. Mondale said in his acceptance
speech that 100 days into his presiden-
cy he would stop the secret war
against Nicaragua. I assume that
you're going to continue your policy
down there in that respect, and he
also implied, of course, once again,
that you, as President, will be trigger
happy and will get us into war. How
will you answer both of those?

A. I'm not trigger happy, and hav-
ing known four wars in my lifetime, I'm
going to do everything I can. I think the
greatest requirement is to strive for
peace, and I'm going to do that.

And, again, I think there was some
demagoguery in this. But, it's my
understanding that all of you have been
given a report— has a kind of a green
cover— on the Nicaraguan situation, and
it has also been delivered to every
member of the Congress.

And believe me, I wouldn't "round
file" those. I'd look at them. Because the
information is in there, it reveals that
everything we've said about the San-
dinista government is a proven fact.
They arc trying to destroy El Salvador
by providing the rebels there with the
wherewithal to do it. They are a
totalitarian government, but you'll also
find in there a statement by Ogarkov of
the Soviet military. This was prior to
our rescue mission in Grenada.

But he openly stated that after all
the years of only having a base in the
Western hemisphere in Cuba, that now
they had bases here in Nicaragua and in

Grenada. Well, they don't have one in
Grenada anymore. And I think that it is
the responsibility of this government to
assist the people of Nicaragua in seeing
that they don't have one in Nicaragua.

Q. Vice President Bush has
asserted that Mondale and the
Democrats don't understand the com-
munist threat in Central America. Do
you agree?

A. That they don't understand the
communist threat? Well, either that, or
they're ignoring it.

Q. Do you think they're ignoring
it?

A. They seem to be opposing
everything that we've tried to do, in-
cluding the aid to El Salvador. As a
matter of fact, I've been very worried
that their niggardly treatment of El
Salvador is such that we might see — it's
comparable to letting El Salvador slowly
bleed to death. And then they would be
able to point a finger and say, "Well,
see, your program didn't work."

Q. The Polish Government is
releasing hundreds of political
prisoners in a move that appears to
meet one of your conditions for nor-
malizing relations. You have removed
some of the sanctions you imposed a
couple of years ago. Will you remove
others, and if so, when do you think
you'll be acting?

A. We're studying what they've
done in their legislation on amnesty very
carefully right now. Our purpose from
the beginning has been, with regard to
the sanctions, that we know that in
some instances those sanctions are
penalizing not only the Government of
Poland with which we're not in very

much sympathy, but the people
themselves. We don't want to impose
hardships on the people.

And if their legislation on amnestj
and things of that kind have met the
conditions that we laid down — yes, we<
will meet with regard to lifting the sai
tions.

Q. Could the United States con-
tinue its defense commitments to N*
Zealand if it's denied court access ft
nuclear ships? And, if this happens,
would it effect American trade with
New Zealand?

A. I don't think that would effect
trade. But I do know, and I would
rather not get in too deeply to
anything — because that is something
that will be worked out and negotiate
with the new Government of New
Zealand. And I have every reason to I
optimistic that there won't be any den
to our ships.

Q. If the port access is denied, a
the Labor Party says it will do, wou
the United States conclude a separa
peace treaty with Australia.

A. I don't want to get into things
anything that might sound as if I'm
pressuring or threatening or anything
the kind. So, let me just say that we'r
going to do our best to persuade therr
that it is in their best interests as wel'
as ours for us to continue with our
alliance, with ANZUS, those countries
as we have been.

'Text from White House press release

DeDartment of State Bulle

HE SECRETARY

Asia-Pacific and the Future

Secretary Shultz s address before the
mcil on Foreign Relations in
tolulu on July 18, 1984.1

understand the future, you must
lerstand the Pacific. I came to this
elusion in the course of many trips to
a and the Pacific as a private citizen.
i five trips to the region as Secretary
State have strengthened my convic-
i. In economic development, in the
wth of free institutions, and in grow-
global influence, the Pacific is in-
asingly where the action is. As impor-
t as it was a few years ago, it is
re important today. And it will be
n more so tomorrow.
Americans welcome this. We see in
growth of this region a vitality that
mises a better future for all. When
sident Reagan addressed the
anese Diet last November he said:

For my part, I welcome this new Pacific
. Let it roll peacefully on, carrying a two-
flow of people and ideas that can break
n barriers of suspicion and mistrust and
d up bonds of cooperation and shared
mism.

Hawaii, our gateway to the region,
;rs vivid and dynamic evidence of
erica's role as a great Pacific nation.
■e the historical westward movement
mr population has been enriched by
growing diversity of talented im-
^rants, including so many of
anese, Chinese, Filipino, Korean,
P 'ific island, and other Asian origins.
<m security, as symbolized by the silent
'iiimony of the Pearl Harbor memorial,
r4 nextricably bound to these islands
l 1 to events throughout this portion of
§1 globe.

J And Hawaii, like our nation as a
Die, enjoys a rich flow of two-way in-
tment and trade with Asia and the
:ific. While our trade with the rest of
world last year grew by only one-
f percent, trade with this region grew
, reaching $135 billion. That means
t over one-third of our total world
de is done with Asia and the
;ific — and it exceeds by nearly a
irter our overseas trade with any
ier area.

)nly a few years ago people said that
icrica's interest and America's
;sence were receding in Asia; they
d we were pulling back. Well, in the
t few years we have turned that
>und, and all kinds of people recognize

Iptember 1984

that fact. As the authoritative Chinese
journal, International Studies Research,
put it, "1983 was a year symbolizing the
return of the United States to Asia."
As we look around the region, we
see good news in many places, good
news for American interests and good
news for the people of the Asia-Pacific
region. A fresh and confident American
foreign policy approach is in tune with
the dynamism of the region and has
helped foster a string of success stories.
Let me run through a partial list.

Japan

The U.S. -Japan relationship has
emerged as one of the most important in
the world. Today our excellent relations
with Japan are particularly reinforced
by the warm personal relationship be-
tween President Reagan and Prime
Minister Nakasone, who have met
together four times in just the last year
and a half. It is a far cry today from
1960, when the first American Presiden-
tial visit to Japan was canceled because
of anti- American rioting.

During the President's visit to Tokyo
last fall, and in intensive efforts since
then, we have worked cooperatively with

Japan's new and more active
diplomacy has brought a stronger com-
mon interest in arms control. At the
Williamsburg summit hosted by Presi-
dent Reagan, Japan participated for the
first time in a joint statement on arms
control and security— and did so again at
the London summit last June.

Although there is more that Japan
needs to do, America has benefited from
Japan's increased defense capabilities
and deepened cooperation with us.
Japanese support for U.S. bases in
Japan, for example, now exceeds
$1 billion— or more than $22,000 for
every U.S. serviceman stationed there.

China

Relations with China are more solid and
stable than ever. We have freed
ourselves of exaggerated fears and
unreal expectations, and we are focusing
on the significant interests our countries
have in common.

• Last year, President Reagan
decided on a major liberalization of high
technology trade with China. This move
offers significant trade prospects for
American exporters and acknowledges
our interest in participating in China's
economic modernization.

• We have smoothed the way for
economic interaction between our two
very different systems by negotiating

We have expanded our cooperation with Japan
as it has become one of the principal donors of
economic assistance to the Third World. . . .

the Japanese to achieve more equitable
access for U.S. products to Japan's
markets, with solid results in the areas
of computers, telecommunications equip-
ment, semiconductors, agricultural prod-
ucts, and many others, as well as access
to Japan's important financial markets.
Much remains to be done, but there is a
record of solid accomplishment.

We have expanded our cooperation
with Japan as it has become one of the
principal donors of economic assistance
to the Third World, not limited to the
Asia-Pacific region but including such
key countries as Egypt, Turkey, and
Pakistan. And Japan is now taking a
new and helpful role in the Caribbean.

agreements on important issues like tax-
ation of foreign businesses, textiles, civil
aviation, and industrial and technological
cooperation.

• China's Minister of Defense and
ours have had an important exchange of
visits. Careful discussions have begun on
ways in which American technology and
equipment might better enable China to
counter Soviet military intimidation.
This is an important development, but it
is also an area where we give careful
consideration to the concerns of our
allies and other friends in the region.
During those frigid years when we had
no contact with China, we were much
criticized. Today we are able to play a
constructive role in China's moderniza-
tion and changing relationship with
Asia.

THE SECRETARY

• irst time ince nor

malization, an American President

ina. President Reagan's trip
made an important contribution, not
only because irmth of the recep-

tion and the substance of the discussions

the ''and"!- and directness
with which the Presidenl addressed our
as well as our hopes.

Throughout our recent development
of the U.S.-China relationship, President
Reagan has insisted that we not harm
our old friends in the course of making
new ones. Our relations with the people
of Taiwan, although unofficial, are warm
and steadily expanding. Last year our
two-way trade with Taiwan passed the

billion level.

Korea

Korean confidence in our commitment to
their defense was shaken by President
Carter's planned withdrawal of U.S.
troops. The effects throughout Asia
were profound. Today, their confi-
dence has been substantially restored,
bolstered most recently by the
President's visit. Our policies in support
of South Korean statesmanship helped
the region to survive the shock of the
Rangoon bombing without escalation to
far wider violence. In the past, such an
event might have led to war. Today,
however, we have helped build a safety

To emphasize the importance we at-
tach to Korea, President Reagan within
weeks of his inauguration met with
President Chun Doo-hwan. Since the
release of a prominent opposition figure
in early 1981, we have seen important
relaxations of authoritarian controls in
South Korea, including the release of
many more political prisoners, the
reduction of restrictions on political ac-
tivity, and the removal of police control
from campuses. Much remains to be
done, but even gradual steps toward
liberalization are not easy for a country
in a virtual state of war, one whose sur-
vival depends on maintaining political
stability. We regard as particularly
significant President Chun's declared in-
tention to turn over power peacefully
when his term ends in 1988, for only
where peaceful change is routine can
genuine political stability prevail.

Southeast Asia

I have just returned from the annual
meeting of ASEAN — the Association of
South East Asian Nations — whose work
is of the greatest importance to our
overall Pacific policy. Each of the na-
tions of this remarkable regional
group — Indonesia, Malaysia, the Philip-
pines, Singapore, Thailand, and, most
recently, Brunei — has a unique impor-
tance. They are diverse in almost every
respect, except in their common commit-

Our exports to Korea for just a single year now ex-
ceed the entire total of economic aid we gave Korea
from 1946 until the program ended in 1981.

net of supportive ties and mutual con-
fidence that is a major factor for keep-
ing the peace.

Boll tered by confidence in its securi-
ty, the Korean economy has been boom-
ing, growing 9.3% last year with infla-

; only 0.2%. Our exports to Korea
for ju: I year now exceed the en

tire total of economic aid we gave Korea

1946 until the program ended in
L981. Korea's annual purchase of
military equipment from the United

arc more than half again as large
as the military sales

year. Korea, in si is bearing

On's share of its own defei -i
paying its own way.

ment to the peace and economic develop-
ment of the region. Collectively, they
represent almost 300 million people with
a combined gross national product of
over $200 billion, a figure that has been
growing by more than 7% annually dur-
ing the whole decade of the 1970s.

Having just met the foreign
ministers of these six nations, I can con-
firm that this is one important part of
the world where the United States is
respected and where our attention to
their problems is appreciated. These
countries are understandably nervous
that their interests may be affected by
our dealings with their giant neighbors
to the north— China and Japan. But a
look at our record cannot but be
reassuring; our cooperative involvement

with ASEAN and similar nations of th
Pacific demonstrates our shared conce
about their problems and our moral co
mitment to their integrity. Certainly w
have a big stake in their continued sue
cess. Our trade reached $23 billion last
year, making ASEAN America's fifth
largest trading partner.

We also are gratified by ASEAN's
success so far in forcing the world to ;
dress the problem of Vietnam's occups
tion of Kampuchea. ASEAN has
developed and won support for a credi
ble political strategy for a peaceful set
tlement. They have steadily built up t\
strength of the resistance, though we
share their concern that the noncom-
munist resistance has not grown as fa
as the Khmer Rouge, an organization
that we all abhor.

We have benefited from the role c
the ASEAN countries in providing fir
asylum for 1.37 million refugees from
Indochina since 1975, and we are proi
of our own role in providing permanei
resettlement for 650,000 — almost half
the entire total. It is one of the great
humanitarian achievements of our tim
and one by which our own society has
been enriched as well.

This is a success story, but it is a
tragedy too. And beyond that, it is a
lesson to be learned. Let us not forge
that many of our friends in Southeast
Asia supported our effort in the Viet-
nam war. They told us then — as Prirr
Minister Lee Kwan Yew did, for ex-
ample— that if we faltered in our pur
pose, the peoples of Indochina would
suffer and their neighbors would feel
threat come closer. They told us then
would be oppression and suffering. Tl
told us there would be boat people. A
they were right.

Finally, the ASEAN countries ha'
played a substantial part in furthering
subject of the highest national priority
full accounting of our prisoners of wa
(POWs) and missing in action (MIA) it
Indochina. Some progress has been
made. The recent return of the remai
of eight Americans from Vietnam is a
significant and welcome event, but th'
is much more to be done. Just last
February, we received a promise fron
Vietnamese authorities of accelerated
cooperation in accounting for missing
Americans, along with agreement to
resume the technical meetings which
provide valuable opportunities for ex-
changing POW/MIA information. We
are pleased that the Vietnamese have
recently agreed to ha^'e a technical
meeting in Hanoi in mid-August, and
look forward to accelerated progress ■
this most important issue.

Department of State Bulle

THE SECRETARY

KZUS

I the South Pacific, the focus of our
licy is our ANZUS [Australia, New
[aland, United States security treaty]
pes, Australia and New Zealand. These
t countries that share with us proud
Editions of democratic freedom and a
1 lingness to bear the cost of preserv-
; those values. It is significant that
;se two allies have fought by our side
all four major wars of this century. If
have the courage and the vision to
p this and our other alliances strong,
will have done much to ensure the
ice we now enjoy.
We recognize that managing a
nocratic alliance requires mutual
insel as well as mutual obligations. It
"or this reason that we have taken
IZUS country views seriously into ac-
int in formulating our arms control
(visions. Arms control, in fact, was
important agenda item in our
etings which concluded on Tuesday in
'llington.

We have been rewarded with a cor-
ponding sense of cooperation and
ponsibility. For example, when the
oor Party took office in Australia a
iir and a half ago, they began a
.rching and serious debate on the
<s and benefits of ANZUS. The result
their thorough review was a firm
i'firmation of the value of the alliance
1 a renewed commitment to it.
With the recent election in New
iland, we are ready and willing, as
'ays, to work with the new govern-
nt and review with our New Zealand
■es the profound basis and mutual
lefits of our alliance. Indeed, my re-
it trip enabled me to meet with the
* Prime Minister, Mr. Lange, even
b "ore he took office. We are confident
rn it an openminded and thorough look
fj i our alliance will result in a reaffirma-
s n of the importance of an effective
Vi -IZUS for the peace of the region and

. world. ANZUS is, after all, not
i nply an isolated alliance for the
tense of one portion of the globe, but
rt of a broader network of relations
it together help to hold in check a
>bal threat. In today's world, a threat
any one region can become a threat
us all.

ie Pacific Islands

ie United States is working, along
th our ANZUS allies, to support
jedom and development for the many
oples of the South Pacific. Some will
ek fulfillment in independence and

others in association with larger states.
Last year, the United States Senate
ratified four treaties resolving old claims
disputes between the United States and
four small island states. This year, the
President has submitted the Compacts
of Free Association with the Federated
States of Micronesia and the Republic of
the Marshall Islands for congressional
approval. We are working with the
island states on agreements to regulate
tuna fishing and to control the dumping
of nuclear waste in their areas.

On a personal note, I stopped at
American Samoa on my way here. I was
there briefly, in Pago-Pago, during
World War II. I have never forgotten

peace, dialogue replaces diatribe, and
the good will of their peoples will carry
the day.

Freedom alone can work miracles.
But in a region filled with historic
animosities, threatened by heavily armed
totalitarian powers, slowed by the need
to gather skills and resources, and— in
many cases— only gradually adopting
democratic processes, sound policy is a
vital ingredient.

The U.S. Role in the Pacific

The Pacific region has benefited from
the mature leadership of many of the
countries I have mentioned. But it has

. . . the ASEAN countries have played a
substantial part in furthering ... a full accounting
of our prisoners of war and missing in action in In-
dochina.

those people, their pride in their tradi-
tions and their aspirations for the
future. It was great to go back. They
are proud today to be Americans, and
we are proud that they are one of us.

I have given you a catalogue of suc-
cesses. There are, of course, plenty of
problems. The Rangoon tragedy reminds
us of the depth of North Korean
viciousness and the ease with which that
peninsula could again become an arena
of violence. In the Philippines, despite
progress made in recent elections
toward restoring democratic processes,
major economic and political problems
continue. Throughout the region, the
threat of growing protectionism
threatens all our trade, and the tragedy
in Indochina goes on.

Other problems lie just below the
surface. In many places, economic prog-
ress is fragile. Tensions among ethnic
groups within countries and territorial
disputes between countries are a con-
stant worry. The region still has one of
the highest concentrations of military
forces anywhere in the world. Thus,
even the most heartening success stories
cannot be taken for granted.

But the forces for success are pro-
found, and I am optimistic that success
will keep the upper hand. When room is
left for individual initiative, peoples and
nations will prosper. When democratic
progress can be made peacefully, stabili-
ty will follow. When nations turn to

also benefited from the sound diplo-
matic, economic, and defense policies of
our own country. I am optimistic
because I am confident that a strong
U.S. role will continue. Most of the suc-
cess we have seen is the result of the
growing strength of the countries of the
region themselves. But crucial as this
may be, America's role has been
singularly important and must be car-
ried forward.

Diplomatically, we are often the
country with which others can work
best Our recovery is in many ways the
engine of economic growth for the entire
region. And our military strength pro-
vides the indispensable deterrent essen-
tial to maintaining stability and con-
fidence among our friends. America's in-
terests in the region and the interests of
our friends require a strong and perma-
nent U.S. presence in every area of the
Pacific.

The three keys to sound U.S. policy
in the region, therefore, are a free and
open world economy, a solid deterrent
posture, and an effective diplomacy. We
are working hard to obtain all three. To
put it another way, the watchwords of
our policy, since President Reagan took
office, have been: realism, strength, and
negotiation. Let me briefly review these
with you.

THE SECRETARY

Realism. Realism requires us to
acknowledge that economic growth lies
at the heart of progress around the
Pacific. It requires as well a recognition
that the single greatest contribution to
the current prosperity of the Pacific

■i is the recovery of our own
economy; indeed, the recovery of our

nomy has been the engine of our

covery spreading ever more
widely throughout the world.

It is essential that we point out this
reality to others. As I told our ASEAN
partners, strong growth in the U.S.
economy has been the major factor in
their own growth. Increased exports to
the United States from ASEAN ac-
counted for over 60% of those nations'
total export increase in 1983. The
achievement of sustained noninflationary
growth in the United States and
maintenance of our open markets are of
prime importance to the developing
world.

Similarly, we must point out the
truth about "protectionism." We in the
United States do face protectionist
pressure, and sometimes we are forced
to limit the growth of imports of some
products. But our economy is a genuine-
ly open one. We are, for example, the
world's biggest market for the manufac-
tured exports of developing countries,
taking over 50% of such exports to all
industrial countries.

It is time for all to realize that Presi-
dent Reagan has turned the American
economy toward productivity and expan-

mous concentrations of military power
in the hands of regimes that have shown
little hesitation to use force, either
directly or as a means of intimidation,
when provided with an opening. Viet-
nam has 1 million men under arms, a
staggering number for a country of that
size. North Korea is one of the most
heavily militarized nations in the world,
and it has shown no scruples about put-
ting force to use. Beyond the strategic
missiles on land and sea that threaten
the United States itself, the Soviet
Union has dramatically increased its
forces in the Pacific region to include
over 50 divisions, 3,000 modern combat
aircraft, its largest fleet, and 135
intermediate-range nuclear missiles,
poised against the nations of the Pacific
area, including ourselves. It has acquired
forward facilities at Cam Ranh Bay and
has now stationed bombers in Vietnam
as well.

Fortunately, nations of the region
are facing these dangers realistically and
building up their own strength. As a
result, we have an increasingly strong
ally in Korea that now bears the lion's
share of the cost of its own defense. We
are hopeful that Japan will steadily
move to achieve its own defense goals,
which would contribute to greater
stability in Northeast Asia and permit
greater U.S. flexibility throughout the
region. And China, with which we now
have a widening and maturing relation-
ship, plays its own special role in lending
stability to the region.

ANZUS is . . . part of a broader network of rela-
tions that together help to hold in check a global
threat.

sion once again. We are the benefi-

. and the world's nations are the
beneficiaries. This is a policy I assure
you we will continue.

The U.S. economy has performed
magnificently. It is a major source of
our own and our allies' strength.

growth, in turn, is a key to
both political and military strength.

Strength. No course of economic
development and no effort at diplomacy

an environment of fear
borne e of weakness. The

and Pacific region is one of enor-

Only a few years ago, our own posi-
tion of strength in the Pacific region
was in question. No more. President
Reagan has made it clear where we
stand. And our forces in the Pacific have
new muscle.

Our presence in Korea is critical to
preventing another war in that penin-
sula. In the vast reaches of the North,
Western, and South Pacific our Navy is
an essential element of stability. Two of
our most important military facilities—
Subic Bay and Clark Air Force Base-
are in the Philippines. Guam has large

and vital air and naval bases. On
Okinawa, our Marines are forward-
positioned and we have there, as well
an air division equipped with the most
sophisticated F-15s and the AWACS
[airborne warning and control system]
Our alliance with Australia and New
Zealand has been a steady force for
peace throughout its 33 years.

Make no mistake; the United Stat<
is committed permanently to the Pacif
and President Reagan's program to
restore America's defense capabilities
giving us the wherewithal to carry oul
the commitments and perform the tas
essential to peace. We shall not shirk
from that role as others take their pla
beside us. We seek the increased
strength of our allies not as a substitu
but as a complement to our own effor

Negotiation. But a sound econom;
and a strong military commitment are
not enough. Nor can they provide stab
ty and confidence by themselves. They
must be accompanied by an active and
creative diplomacy and a willingness I
negotiate.

It is through diplomacy that we ha
forged security ties with our democral
ANZUS partners, Australia and New
Zealand. It is diplomacy that last weeV
brought together in Jakarta the
disparate group of ASEAN nations in
their remarkable annual session of giv
and-take and enhanced economic
cooperation. That cooperation has gor
beyond the economic realm to devise ;
strategy to deal with Vietnam's occup
tion of Kampuchea and support for th
noncommunist resistance. And it is
through diplomacy that we build for t.
future.

On this trip, which I conclude tod;
we began small but potentially far-
reaching steps. In Jakarta, I signed a
memorandum of understanding on in-
vestment issues with Indonesia. This i
only a first such agreement in this fiel
but it means we may contemplate an
eventual investment treaty and even,
the far future, build toward a general
agreement on investment to parallel t
General Agreement on Tariffs and
Trade.

In a similar vein, during this trip i
general subject of the Pacific Basin w;
addressed formally by a group of
governments for the first time. Initial
discussions will have a specific focus o
human resources development. This is
only a start, but its implications for th
years ahead could be great.

r\o»T^ r\ rrt/i

THE SECRETARY

Finally, it is diplomacy that enables
;o deal with the world as it is. Our
nomy flourishes best in conjunction
h others who understand the benefits
,he free market and put it into prac-
. Our military's mission is to defend
from those who do not wish us well.
it is through diplomacy and negotia-
i that we are able to foster our in-
jsts with adversaries as well as
nds. Here in the Pacific we value our
;e association with our fellow
locracies and with others who share
goals. We also engage and work
structively— and often to mutual ad-
tage — with those whose view of the
r to organize political and economic
is quite different from ours. Thus, it
hrough this third pillar of our policy
t we have the best hope of forestall-
conflict and solving problems before
y threaten to overwhelm us.

iclusion

ive portrayed a scene of success
ay. It is undeniable. The Pacific and
future are inseparable. I believe that
•e is no more remarkable story of
gress and no greater source of op-
ism than here in this region. But I
>e also called attention to the continu-
challenge ahead and to the ways we
moving to meet it. There are prob-
s. But we have a lot going for
-not created by luck or chance but
)ur own endeavor and our own vi-
1. My message today is simply this:
)ur performance, by our strength, by

diplomacy, let us encourage this
nendous momentum toward peace

development in the Pacific.

'Press release 170 of July 19, 1984.

Secretary Visits Asia;

Attends ASEAN and ANZUS Meetings

Secretary Shultz visited Hong Kong
(July 7-8, 1984), Malaysia (July 9-10),
Singapore (July 10-11), Indonesia (July
11-14) to ■participate in the Association
of South East Asian Nations (ASEAN)
dialogue, Australia (July 14-15), and
New Zealand (July 15-17) to attend the
33d meeting of the ANZUS Council
[Australia, New Zealand, United States
security treaty].

Following are his remarks and news
conferences made on various occasions
during the trip, the text of the ANZUS
communique, and a joint news con-
ference held by Secretary Shultz and
Foreign Ministers William Hayden of
Australia and Warren Cooper of New
Zealand.

NEWS CONFERENCE,
KUALA LUMPUR,
JULY 10, 19841

I would like to express my appreciation
to the Prime Minister of Malaysia and
his colleagues, the Deputy Prime
Minister, the Acting Foreign Secretary,
and all the people who have been so
gracious to us and engaged with us in
discussions of matters of concern to both
countries and also have made our stay a
very interesting and pleasant one.

This is not my first time to
Malaysia, so it is interesting especially
for me to see the progress which is right
in front of your eyes. My first visit was
about 10 years ago when I was
Secretary of the Treasury, and I have
been here since as a private citizen. I
have had a chance to watch the growth
of Kuala Lumpur, not only in the city
itself but the wonderful highway from
the airport here. It is a pleasure to see
this tangible evidence of economic
development. Again, I am very grateful
for the great hospitality that we have
had.

Q. Is the United States willing to
give more aid of any kind to the non-
communist elements of the Kampuchea
coalition?

A. The question of Kampuchea has
come up in our discussions here, and I
am sure it will be a centerpiece in the
ASEAN discussions. The United States
has basically taken the view that we will
support the efforts that the ASEAN
countries are making, and we support
them diplomatically, and we support
them in other ways, some in terms of

direct support to individual countries,
especially Thailand as a front-line state.
We have had massive support for the ef-
forts over the flood of refugees fleeing
the Vietnamese aggression, and in other
ways we have been and will continue to
be supportive, and I don't want to com-
ment on incremental moves one way or
another.

Q. Are there any new views you
could share with us on the proposed
U.S. talks with the Soviets in Vienna?

A. There are diplomatic contacts
practically daily on the subject. I've
been, of course, following it very closely,
but the situation remains about where it
has been for the last few days, namely
the Soviet Union seems to be having
great difficulty taking "yes" for an
answer.

Q. The issue of U.S.-China rela-
tions has been brought up with Malay-
sian leaders and will be brought up
again in Jakarta. In yesterday's brief-
ing by Malaysian officials, there seems
to be an indication that Malaysia has
expressed concern, not just over
military collaboration but also
technological collaboration which
could lead to a defense or military
capability and a Chinese threat to
Southeast Asia. Has the United States
given an assurance to Malaysia, and
later to ASEAN, that it will continue
to brief them on any major develop-
ment in U.S.-China relations, and is
this consultative procedure now going
to be a part of U.S. -ASEAN relations?
A. The meeting that you referred to
must be one I wasn't in, because perhaps
somebody else talked about those things,
but I know that the question of China,
and its relationship to the ASEAN ef-
forts in Kampuchea and its posture in
Asia generally, is of great interest, ob-
viously, to Malaysia and others in the
region. The evolution of U.S. relations
with China is also of central interest.
We do, as a matter of course, keep our
friends advised of what we are doing,
and we will certainly continue to do
that. It's our view, and I believe widely
shared in this part of the world, that the
emergence of a good and stable relation-
ship between the United States and
China, on the whole, advances the idea
of stability in this part of the world, and
it is a net plus. The relationship of the

-.K^r 1QQ/1

THE SECRETARY

military sort that you mentioned in your
question is, of course, in its early stages
and focused on defensive matters, and I
don't think is, in any sense, a threat to
other parts of Asia. Insofar as Southeast
Asia is concerned, of course, the center
of gravity of the U.S. approach is with
ASEAN and the countries. Malaysia ob-
viously included, that make up the
ASK AN countries. We have worked
very closely with them and will continue
to do so.

Q. The Prime Minister has ex-
pressed regrets that trade relations
between United States and Malaysia
have not progressed satisfactorily.
What's your view on this?

A. I don't know what the right
definition of satisfactory is. If you just
take the exports of Malaysia to the
United States, if you compare 1983 with
1982, they rose 13%. If you take the
most recent figures, which are the first
quarter of 1984, and to deal with
seasonal factors you should compare it
with the first quarter of 1983, it's up by
about 50% now. The percentage in-
creases are very large and pretty much
across the board as to products, in-
cluding the often-cited example of tex-
tiles, which I think the increase is
something on the order of 69%, very
large, but that is on a small base. So
there had been large increases.

To my mind, what these increases il-
lustrate is the impact of the expansion
to the U.S. economy on the economies of
countries throughout the world, and, in
citing these figures, I would say
Malaysia is not an exception, not that
numbers like 50% can be typical of
anything, that's such a gigantic increase.
But I do think that, in a sense, the hero
of world economic recovery is the
recovery of the U.S. economy, and it has
been a very good thing for everybody,
including the people of this region.

Q. Several U.S. officials have
talked about increasing humanitarian
aid to noncommunist factions in Kam-
puchea. Can you give us an idea of
what kind of annual aid in terms of
dollars you have been giving and what
kind of proposals you have offered?

A. I suppose the most important
n which aid is given — of the sort
you have in mind — is very human and
personal, and that is the longstanding
and heavy involvement of the United
States in coping with the large flow of
refugees from Vietnamese aggressi" I
think the total number of refugees over
i years — or what is the time

period of these numbers about since
L975? So say almost 10 years, is like
1 ,350,000, something on that order, and
roughly half of those have wound up in
the United States— some 650,000.

We have reached out to this area
and I suppose in the tradition of the
United States, of being a country made
up, in a sense, of refugees. The flow
from this part of the world has been
taken in, and the most humanitarian
thing you can do is to help people when
they are really in need, and we will con-
tinue to do that.

Insofar as more direct assistance of
one kind or another right here, I don't
have the numbers right on the top of my
head, but if you add up the development
assistance of the ASEAN countries, the
security assistance, and the more
humanitarian— directly humanitarian-
aid, it comes to a very large annual
number, and we have been having some
discussions out here as to what that
number is. It depends a little bit on just
the things that you include in it, but it's
on the order of half a billion dollars or
perhaps larger.

Q. There was a report in the local
paper to the effect that there was a
rapid increase in the Soviet buildup in
Cam Ranh Bay. I wonder if you can
comment on the implications of this.

A. There is a continuing Soviet
buildup of naval forces— in other words,
a capacity to project power in this part
of the world. And I think it's a matter
that should be of concern to everyone; it
is of concern to us. And it only em-
phasizes the importance of strong
friendships here, and not only in the
case of the ASEAN countries but
Australia and New Zealand as well. So
it's part of the general Soviet develop-
ment of their military capability, and I
think that shows the importance of hav-
ing a strong deterrent capability, not
only of the United States but in coopera-
tion with our allies.

Q. I understand that the govern-
ment has reaffirmed its desire to pur-
chase F-16-As, the relatively ad-
vanced aircraft. What is the U.S. feel-
ing about this?

A. I don't believe the Thai have
finally made up their minds. They have
been given, as have other countries in
this region, a thorough briefing on the
various so-called FX aircraft so that
they can see the characteristics of them,
thi' costs of them, the maintenance prob-
lems that they all pose, and so forth.
And they will have to look at all of these
factors and decide what is in their best

interest in a matter of discussion with
us. But as a general proposition, we
want to support the efforts of the cou
tries in this region to look to their
security. And as to decisions about pa
ticular pieces of military equipment,
they are made case by case, but as a
general proposition, we look with favc
on sales to the ASEAN countries

Q. We understand that the Mala
sian position is that an economical!)
strong China will sooner or later les
to a militarily strong China which h
the potential of being a hegemonisti
power in Southeast Asia. That is th<
concern. What is your response to tl
line of thinking about China if it
becomes economically, and later on
militarily, strong as well?

A. I think you have to start with
the proposition that China is there, it
an important country, it has been for
long time, it will continue to be, and,
don't have any doubt in my mind at a
that as an economic proposition Chine
will develop. And it seems to be ex-
pected that's going to take place. The
question is whether that development
from the standpoint of stability in this
region, is best done with other countr
cooperating and being a part of it. Ar
we believe that it is important for our
own interest, as a potential trading p;
ner and in the interest of security ma
ters and strategic considerations that
are very clear, to have a good workin
relationship with China. So we start 1
build that up in a way that we think
lend stability to this part of the work

Q. In recent years the Asian
region, particularly ASEAN countrl
has become quite an attractive area
investment for American businessm
compared with other regions of the
world. What, in your opinion, could
ASEAN governments do to hasten 1
flow of American investment in this
region, particularly with regards to
Malavsian participation here?

A. Basically the ASEAN countrit
are doing very well in expanding thei
economies and in expanding their tra<
particularly with the United States, a.
in attracting investment.

Of course, the basic conditions th:
attract investments are: number one,
the prospect of realizing a good rate (
return on the investment, and numbe
two, being able to sustain it because <
confidence that the rules of the game
that prevailed when you made the in-
vestment are going to stay the same
that you know the conditions that are
going to affect you. I think that

Department of State Built

THE SECRETARY

ything that can be done that affects
ise propositions is all to the good.

It seems to me that it's taken for
mted these days, and is a proper
ng, that a country that is the host to
estment expects to get something out
it — not simply just the investment as
;h. But one of the reasons that
eign investment is welcomed is that
Dple of the host country learn
nething; they get trained, they
:ome better able to carry on
■mselves. There is a transfer in that
ise — the deeper sense of the transfer
technology and managerial and other
lied capabilities.

But I think from the standpoint of
ir question what is there to do, it is
ing as much of a sense of continuity
possible and allowing investment to
ne into areas that are potentially
)fitable.

There is one aspect of this that I like
emphasize, particularly in the light of
i debt problems that we run into in
nous parts of the world, not so much
this part of the world as others. Part
the debt problem results from an at-
lde toward foreign equity investment
,t, it seems to me, needs to be
tnged. It results from an attitude that

s when you want to attract resources
m another country to come to your
intry and help in the development of
you should borrow the money rather
in attract it as equity. And countries

that and did it to excess. When they
1 into rough weather, as always hap-
is with world economy — it has its up
1 it has its down — they found
mselves debt-heavy, and the debt was
■y difficult to carry, whereas, if the
>portion of the resources drawn in
m outside were heavier in equity,
■n the equity, so to speak, carries
i\f. There is no obligation to pay in-
•est or to pay it back. It's there to par-
.pate, and, of course, it's there as risk
)ital and hopes to profit well from
it posture. So, I think that, just as
npanies have historically had to look
their debt equity ratio, one of the
sons that we should learn from our
oerience of the last few years is that
antries, too, need to look at their debt
aity ratio. And this to my mind is an
ditional reason why it's healthy to
ng in equity foreign investment. It
'es you greater protection in the sense
ring periods that are inevitably going
come when everything isn't booming.

Q. In your opinion, there should be
some kind of continuity of foreign in-
vestment. In your meeting with
American businessmen this morning,
did anyone bring up any fears, or are
they generally satisfied?

A. They are generally satisfied. No
one is perfectly satisfied, so there are
always things that they would like to see
done.

There are two things in particular
that are being discussed with varying
degrees of urgency, both following the
Prime Minister's visit to Washington.
One is an investment treaty, and the
other is some discussions that are
restarting on a tax treaty. Both of these
two things would help in just the way
that I cited. An investment treaty would
tend to set out the rules of the game as
understood between the two countries.
And a tax treaty would set up a regime
that basically avoids double taxation and
makes clear, as between the two coun-
tries, which country is going to tax what
kind of earning and the individual enter-
prise. Then those are the rules of the
game. As we all know, the tax element
in any investment is a very important
one. So those are the two particular sug-
gestions that are being discussed, and
we hope that those discussions would
progress well.

Q. The Olympic Council of
Malaysia and the Olympic Council of
South Korea and a number of coun-
tries have been receiving letters
allegedly from the Ku Klux Klan
threatening athletes who are going to
the Los Angeles Olympics. Has the
U.S. Government investigation shown
whether it is from any particular
country or source, and could you com-
ment on this?

A. I have just heard about these let-
ters from the Ku Klux Klan — or alleged-
ly from the Ku Klux Klan — and they are
of such a nature that it is hard to believe
they were actually sent by any such
organization. And the sentiments they
expressed are totally unacceptable. It
almost makes you wonder if it isn't a
disinformation campaign of some sort.
And they will be looked into.

But the main point is that athletes
from all over the world are most
welcome at the Olympics in Los
Angeles. There are a record number of
countries that are attending. There will
be great care taken to see that the
security of all is well provided for, and
there is a tremendous effort being made
along those lines, as well as in all other
aspects of the conduct of the Olympics.
Just before leaving on my trip, I met

with the Olympic officials, both the U.S.
and international Olympic officials, and
we went over all these things. And I
think that, on the whole, matters are in
very satisfactory shape, and we look for-
ward to a wonderful amateur Olympic
games coming up.

Q. Did you mean Soviet disinfor-
mation?

A. No, I just — we will leave it at
that.

Q. There has been a lot of talk of a
Pacific Basin concept, something like
a Pacific version of the EEC [Euro-
pean Economic Community]. Do you
have any thoughts on it, if it's worth-
while to have some sort of common
market here?

A. The idea of a Pacific Basin is
sort of intuitively attractive. But I don't
know of anyone who really believes that
some organization like the European
Community is the right sort of parallel,
something that attempts to be opera-
tional in nature.

On the other hand, there are many
who feel that an improved way of shar-
ing information, of identifying common
problems, of developing a consensus
about how they might be dealt with, and
of having that kind of touch between the
countries of the region might be useful.
We've been exploring that. Ambassador
Fairbanks has been out around the
Pacific talking with people, trying to
gather a sense of their ideas, and it was
interesting to us, and quite welcome to
us, that the ASEAN countries decided
to put this genera] idea on the agenda of
the meetings that will be taking place in
Jakarta, and I will be very interested to
hear what their views are. But I don't
think that any operating sort of formal
organization, like the European Com-
munity, is the odds at all. And what may
emerge, if anything, is something that is
much looser and more in the nature of
an analytical, information-sharing,
consensus-building, problem-identifying
kind of organization.

But the area itself is going like
gangbusters. It's expanding. It's very
dynamic, and maybe that's a good argu-
ment for having the government stay
away from anything like this. It's doing
so well without the benefit of an
organization. But at the same time, it
may be that there are some things that
could be added by a loose form of
information-sharing. But this is an idea
that will be discussed a lot not only in
Jakarta but subsequently. From the U.S.
standpoint, we are very interested in
taking part in those discussions.

iptember 1984

THE SECRETARY

NEWS CONFERENCE,
SINGAPORE.
JULY 10, 1984-

It is always a special privilege to come
to Singapore because of what Singapore
represents in terms of its vibrancy and
growth, and, of course, also because it
gives me a chance to visit with Prime
Minister Lee Kuan Yew, such an ex-
traordinary person. I have had that
privilege again this afternoon. I would
take this occasion to express my admira-
tion for him, my pleasure at having a
chance to talk with him again, and my
gratitude for being received so
hospitably here in Singapore.

Q. Yesterday in Amman, French
President Francois Mitterrand said
that the Soviet Union should be in-
volved in the peace process in the Mid-
dle East. How do you feel about that,
and if the current climate is such, is
Soviet involvement either likely or
desirable?

A. The Soviet Union has been in-
volved in the turmoil in the Middle East.
What we seek is solving the problems
there, and we have not seen any
evidence of a constructive instinct on
their part toward solving the Palestinian
problems, toward solving the problems
of Lebanon, or other aspects of the Mid-
dle East picture. We are always looking
for constructive contributions, but we
just have not seen any from that
quarter.

Q. In view of the Soviet Union
pouring arms to the Vietnamese, what
is the rationale behind your govern-
ment's decision not to give military
aid to the Kampuchean coalition to
fight Vietnamese repression?

A. Our program here is to support
the efforts of the ASEAN countries. We

that they have come about this
very intelligently and strongly, not only
in terms of their efforts to support the
democratic forces in Kampuchea but
also in their diplomatic efforts to
demonstrate to the world and have the
world support the condemnation of Viet-
namei - aggi d the development

of a better life in Kampuchea. So we
have fell that the be or the

United States is supporting this good ef
fort, and we will continue to do so.

Q. The State Department has
placed a ban on nonessential travel to
Bulgaria. Is it because of allegations
of Bulgaria's notorious involvement in
drug trafficking or because of recent
reports coming out on Bulgaria's in-
volvement in the assassination attempt
on the Pope?

A. No, the advisory on travel to
Bulgaria is simply a precaution to
Americans that they are well advised to
stay away at a time when there are
some tensions. This has nothing to do
with the Italian case. It has to do more
with the drug case and some of the
other repercussions of it.

Q. Most ASEAN members are
quite concerned about recent
U.S. -China relations and U.S. expecta-
tions of China's role in this region.
How would you allay such fears?

A. People in the past have been con-
cerned that we are concerned about
what we do, but I think that the basic
point is that China is an important coun-
try in Asia and in the world generally,
obviously. The center of gravity of our
efforts in this part of the world is on
what ASEAN is doing. Nevertheless we
think that a constructive relationship
between the United States and China
lends stability to the region, not the
other way around, and to the extent
that statements like that assuage
people's fears, then so be it.

Q. You said this morning and
today that we are not supplying more
aid to the Kampuchean coalition
because we support ASEAN. Are you
saying that we consult with ASEAN,
and they do not want us to supply
more aid to the Kampuchean coalition?

A. We consult with the ASEAN
countries. We discussed this whole ques-
tion at length today. I did with Prime
Minister Lee Kuan Yew yesterday in
Kuala Lumpur, and I expect to have fur-
ther discussions of it in Jakarta. What I
can say is that we believe we are playing
a genuinely helpful and constructive part
in this effort, and beyond that I am not
prepared to go.

Q. The ban on travel to Bulgaria,
is that to all Americans or just to
government officials?

A. We are concentrating on govern-
ment officials, but I think all Americans
might take note.

Q. There are certain reservations
stated by the Indonesians concerning
the U.S. agreement in principle to sell
arms to China. How sympathetic to
the fears expressed by Indonesia will
the United States be on this issue?

A. Of course, we will listen to com-
ments that our friends have to make
about things we are doing on all sorts of
matters. People register their views
with us about arms control, about our
economy, about all manner of things, in-
cluding subjects such as that.

We listen to our friends, and at the
same time we believe that it is impor-
tant that the United States develop a
stable and mature relationship with
China. The new fledgling military rela-
tionship is something that is just start-
ing, and the concept of it has entirely t
do with defensive arms. I think it is
worth calling people's attention to the
fact that there is a very large number I
Soviet forces ranged on China's north-
ern border, and there are many SS-20
missiles aimed in China's direction. So
there are threats that China must be
concerned about, naturally, that are dt
ferent from things that Indonesia may
be concerned about.

Q. Do you have any indication th;
the Soviet Union has been trying to
dissuade other countries not in the
Soviet area from coming to the Olym
pics? You suggested that perhaps
there was some disinformation in-
volved in this, a letter that went out
allegedly from the Ku Klux Klan.
Have there been any other indication
from other types of channels?

A. I didn't connect that letter with
the Soviet Union in any explicit way,
me just note. We have seen some acth,
ty designed to try to discourage peopk
and, of course, we know very well the
countries of Eastern Europe were disj
pointed and are disappointed not to be
going to the Olympics. The fact of the
matter is that a record number of cou
tries is coming to the Olympics. Let rr
assure everybody again that strong
precautions are being taken to ensure
that the situation is a secure one and
that the games can go on in a strong
and lively competitive spirit and in tht
spirit of amateur athletics. We all loot
forward to the Olympics.

Q. Apart from the talks with Le>
Kuan Yew on the Kampuchean ques
tion, what are the other topics that
came up for discussion?

A. I don't want to go into detail c
a discussion with a head of state, but
general topics that we talked about ar
certainly things that you would expect
The Kampuchean question was perha{
foremost. We discussed world econom
issues, particularly as they bear on thi
part of the world. The Prime Minister
sees very well the connection between
what goes on here and what goes on
elsewhere, so we spent a good bit of
time on that. I called attention to our
concerns about the problem of intellec
tual property. We had a little discussi'
about that. That was the general rang
of our discussion.

irtmrtnt r^t C t -, + ^

THE SECRETARY

Q. Again from this morning, you
id that the Soviets are having trou-
e taking "yes" for an answer regard-
g our going to the Vienna talks. Is
ie U.S. position that we've accepted
ithout preconditions and that the
nited States will still go to the
ienna talks even if we can't talk
>out the reduction of missiles?
A. We have had a proposal to
scuss questions involving militarization
space, and the Soviets put forth a
ries of topics that they thought were
e equivalent of that concept. We have
i id we will participate in a discussion of
at topic, and we have some ideas
irselves about how the topic should be
;fined. In our view, things that go
rough space that are military, like
dlistic missiles, ought to be on the
jenda, and we intend to discuss them.
) that is saying "yes" and at the same
Tie suggesting that the way they
:fine the topic is all right, but there are
>me additional definitions that we think
e important.

Q. The Soviets have at various
I mes also suggested that a precondi-
on to those talks would be an agree-
«nt to a moratorium on all testing of
itisatellite systems. Would the
nited States be prepared to accept
at. or are we not accepting that as
. ie of the conditions?

A. I don't think it is clear that it is
precondition, although sometimes
atements are made that make it a
iiestion. This is just the kind of thing
re e need to get straightened out, and are
ying to get straightened out, in our
•ivate diplomatic discussions with the
jviet Union.

We think a moratorium on testing
ght now, with them having testing and
jployed an antisatellite system and we
}t having done so, is assymetrical with
;spect to its impact. A moratorium on
eployment is the sort of thing that is
ry difficult to verify, and verification
the heart of the problem here. If you
in't verify a moratorium, it's hard to
now quite what it means. Or, to put it
nother way, what is important is to get
lto some discussion of this issue and
se what can be made of the issue of
erification. Until you do that, it doesn't
eem wise to agree to something that
ou haven't really worked out.

Q. The fact that you drew atten-
'ion to the question of American in-
uellectual property in your talks with
Jhe Prime Minister today reflects a
certain amount of concern on your
iiart over the question of computer
Software piracy in Singapore. Were
j'ou interested in hearing the views of

September 1984

our Prime Minister on this issue, or
were you actually advocating that the
Singapore Government do something
about this?

A. We think that it is a problem,
and something should be done about it. I
am always interested in hearing the
Prime Minister's views, and I did. And I
would say that the problem exists in
places other than Singapore. It is not
just something here. It is a concern that
we have with respect to many countries,
and I think it is a very legitimate prob-
lem that needs to be addressed. It is in
the interests of a country like Singapore
to address the problem because how that
property is to be handled affects the
flow of that property around the world,
not only here but elsewhere.

Q. At last year's ASEAN meeting,
as I recall, you were extremely critical
of the Vietnamese, especially on the
issue of the return of remains of
American servicemen and the general
prisoner-of-war issues. Since then, a
high-level U.S. delegation has gone to
Vietnam. The Vietnamese are, after
some fits and starts, releasing some
further remains of Americans. How do
you now feel about what Vietnam has
done or is doing in this area, and
could you say a word about what you
expect more broadly about U.S. rela-
tions with Vietnam in the year or two
ahead?

A. Some progress has been made.
We welcome it, and there is the prospect
of some further progress. We very much
want to see that happen. There is a
large problem ahead of us. There are
many people unaccounted for, possibly
even still alive, and so the issue is a very
important one.

Insofar as long-term relations with
Vietnam are concerned, it represents a
major stumbling block that must be got-
ten out of the way. Even if there were a
Kampuchean settlement of some kind
that was satisfactory, we would still find
this a matter of great concern and
would want to see it dealt with properly.

Q. You say that possibly there are
some still alive. Has anything been
learned in the past year that would
give any further indication whether
any are alive, or does our information
stand precisely where it did a year
ago?

A. My statement does not reflect
any new information. It is just that
there are a large number — some
2,500 — that we don't know about, and
so there is always the possibility that
there may be someone still alive. That is
all I meant.

Q. Returning to the intellectual
property question, might there be any
chance of GSP [generalized system of
preferences] quotas being used as a
possible lever to gain satisfaction
from Singapore and other countries
where there is a problem?

A. That proposal has been made as
I've heard, and I think that the right
way to go about this is to have the kind
of discussions that I've had. I hope it
will be possible to get it straightened out
without going in for that kind of condi-
tionality. It is the sort of thing that
tends to arise when a problem nags and
nags, and people start feeling strongly
about it.

I might say on the GSP legislation,
it is something the Reagan Admin-
istration strongly supports, and we have
been working at that for over a year
now, so that the GSP would be ex-
tended. It is not progressing well in the
House of Representatives, it is not pro-
gressing at all. But we want very much
to see some action by the Congress so
that it doesn't lapse at the end of this
year. We will be working on that.

Q. Last September, a joint appeal
on Kampuchea was signed by the
ASEAN countries. This move was
backed by the United States, and the
third step in the resolution on the
Kampuchean problem was the pro-
posed normalization of relations be-
tween Vietnam and the United States.
If such a thing should go through,
what sort of normalization, what sort
of relationship, would the United
States establish with Vietnam? Would
it include just developmental aid?

A. I'm afraid the prospect of nor-
malization is so far away that it is really
fruitless to speculate about it. There is
the MIA-POW issue we've spoken of,
and right now what we see in Kam-
puchea is a continued Vietnamese ag-
gression. So far as I can see, efforts to
bring about any kind of reasonable
negotiation on the subject have run into
a stone wall from Vietnam. I think that
any thought of normalization with the
United States is just miles away.

Q. There were reports a couple of
years ago, at least, that there were
probably several Americans still alive
who chose to stay. Are you referring
to that kind of thing or to Americans
still alive but in prison?

A. I was making a general observa-
tion, in effect, that when you are
without knowledge of as many in-
dividuals as is the case here that it is
always possible that someone may still
be alive. That's all, there's nothing, no
new information nor any special implica-
tion connected with the statement.

THE SECRETARY

STATEMENT,
ASEAN DIALOGUE,
JULY 13, 19843

This new opportunity to carry forward
my country's constructive and fruitful
dialogue with ASEAN is most welcome;
in fact, it is genuinely refreshing to
return to Southeast Asia and meet again
with my ASEAN friends.

I am delighted to note the addition
of Brunei to this association. The United
States has a tradition of diplomatic con-
tact with Brunei extending well back
into the 19th century.

The accomplishments of all the
ASEAN countries, individually and as a
group, have captured worldwide atten-
tion and admiration. In 1967, at a time
when few outside the region rated your
prospects very high, you founded this
unique organization to promote eco-
nomic development, in recognition of the
importance of regional cooperation and
self-help. Through disciplined and
creative economic management, your
real growth rate has averaged over 7%
a year for the last decade. Through
realism and courage you have forced the
world to address the threat to regional
and world peace posed by Vietnamese
aggression in Kampuchea. You in-
stituted this remarkable annual meeting
in early recognition of the importance of
serious dialogue between developed and
developing countries.

In all these respects the ASEAN
countries have distinguished themselves
by realism, imagination, and sense of
purpose. You face formidable economic
problems and the dangers of Vietnamese
aggression. You bear a significant
burden of refugees for whom you have
generously provided first asylum. But
your success so far enables you to con-
front these problems with confidence
and makes other nations— my own most
definitely included— want to work with
you.

Thus, in contrast to so many parts
of today's world, ASEAN represents the
stability and progress thai arc the goals
le everywhere. ASEAN, like the
United States, faces both opportunities
and problems. These meetings give us
the chance to consult on both, and that
is why we are here. We can take
satisfaction from our common record to
date. But we cannot rest on our laurels.
day, 1 would like to discuss three
of the most serious challenges we face
he principles upon wh
lenl Reagan has determined
the United States will address them.

They are principles that provide, I
believe, a solid basis for cooperation be-
tween my nation and ASEAN.

• The first is realism: we must see
the world as it is, not as we would wish
it to be, facing up to problems as well as
opportunities.

• Next is strength: no policy can
succeed from a position of weakness.
Economic vigor, military power, and a
strong sense of national purpose are
prerequisites to the achievement of our
objectives.

• And third, negotiation: fortified
by realism and strength, we must help
to resolve international problems
through principled, effective diplomacy.

On these pillars of realism, strength,
and negotiation, the United States is at
work today in the interest of peace and
freedom. On this basis we are prepared
to work with ASEAN on the great
challenges we face in common.

Preserving Peace and the
Challenge of Arms Control

No issue is more important today than
preserving peace, and none has higher
priority for the United States. Responsi-
ble policies to reduce the risk of war and
strengthen international stability are a
goal shared by all our peoples. The first
challenge of arms control is an impor-
tant part of this effort to preserve
peace.

Preserving peace in the nuclear age
is a duty we owe all inhabitants of this
planet. Ensuring a lasting peace is
foremost in President Reagan's mind,
for as he has said: "A nuclear war can-
not be won and must never be fought."
He said it in China. He said it in Ger-
many. He said it in Japan. He said it in
England. He said it in Congress. He said
it in the Oval Office. He has said it
throughout America. It is the essence of
a principle that has the full support of
responsible people everywhere.

Much of the debate on nuclear issues
focuses on the enormous destructive
potential of existing arsenals. President
Reagan has led the way in the responsi-
ble effort to reduce nuclear arsenals to
equal levels, with effective verification.
He has proposed the complete elimina-
tion of an entire class of nuclear
weapons— American Pershing lis and
ground-launched cruise missiles and
Soviet SS-20s, SS-4s, and SS-5s. He
has rejected Soviet proposals that would
simply transfer such weapons from
where they threaten Europe to where

they threaten Asia. In the strategic
arms reduction talks (START), he has
proposed deep reductions in intercon-
tinental nuclear arsenals, focusing on
the most powerful categories of
weapons— ballistic missile warheads— a
goal no previous strategic arms treaty
has even approached. Last November,
the Soviets walked out of the INF
[intermediate-range nuclear forces]
negotiations and in December suspends
indefinitely their participation in
START. The United States is ready to
resume both negotiations at any time
and in any place, without preconditions
We hope the Soviet Union also will con
to recognize that its interests are best
served by returning to the negotiating
table as soon as possible.

But the United States has not sim-
ply waited for Soviet responses. In add
tion to our efforts, extending over mar
years, to negotiate balanced and
verifiable arms control agreements, we
have made substantial reductions in ou
own nuclear stockpile, as well as im-
provements to its safety and security.
Both the number and megatonnage of
our nuclear arsenal have been substan-
tially reduced. Our stockpile was one-
third higher in 1967 than it is now, anc
its total destructive power has declinec
by 75% since 1968. In addition, we anc
our allies have begun a process of redu
ing the stockpile of NATO nuclear
weapons in Europe, bringing it to the
lowest level in 20 years. Even in the
absence of an INF agreement, at least
five nuclear warheads will be taken ou I
of Europe for every new Pershing II
and cruise missile introduced. The resi,
will be a net reduction of 2,400 nucleai
weapons over the next few years.

America has begun to modernize it
nuclear forces, even as we have sought
to reduce nuclear arsenals. We have
done so after a decade of restraint-
restraint unmatched, indeed exploited,
by our adversaries. We are modernizin
in a way which, in conjunction with out
arms control proposals, will enhance
stability and reduce the risk of war. Oi
modernization program provides impor
tant incentives for the Soviets to agree
to our proposals for equitable and
verifiable reductions in arsenals.

In addition to our far-reaching pro
posals for reducing the level of nuclear
armaments, the United States has pro
posed a number of other important arr
control initiatives to reduce the risk of
war and halt or reverse the growth in
weapons.

Deoartment of State Bullet -

THE SECRETARY

In Geneva, Vice President Bush
esented to the Conference on Dis-
mament a draft treaty for a com-
ehensive ban on the development, pro-
iction, stockpiling, transfer, and use of
emical weapons.

In Stockholm, together with our
ATO allies, we have put forward a
ckage of confidence-building measures
signed to reduce the risk of a Euro-
an war occurring by accident, surprise
tack, or miscalculation.

In Vienna, at the mutual and
lanced force reduction talks, we
esented, again with our European
ies, a new initiative that seeks a com-
Dn ground between Eastern and
estern positions and progress on
•during the conventional forces of
j\TO and the Warsaw Pact. We will
I rsist in our efforts to reduce the risk
I war and achieve substantial reduc-
es in nuclear arsenals. And we will
1 rsevere in our efforts with the Soviets
ii build a relationship based on realism,
istraint, and reciprocity.

Unfortunately, until very recently,
l| a only response of the Soviet Union
] s been silence or walkout. We hope
,1 it their recently expressed interest in
I gotiations at Vienna represents a
i ange of heart. We have accepted the
I viet offer to begin talks on weapons in
lace, and we intend to go to Vienna.
| iere are no preconditions attached to
I r willingness to discuss arms control
i itters. The Soviets have proposed
J me issues and we, too, will have issues
I j want to discuss. We are now trying
1 work out arrangements through
'•'» jlomatic channels.

We want to improve our relations
' th the Soviet Union across a wide
A ectrum. We have close and continuous
I jlomatic contact with them at all
I rels. President Reagan has called this
jar a year of opportunities for peace.
I e are making every effort to ensure
j at these opportunities multiply and
|at we make the most of every one of
em.

At the same time, we will continue
r efforts to strengthen our deterrent
rces. This is as important to keeping
e peace as the effort to control arms,
is one of the ironies of the nuclear age
at weapons must be built in order that
ey not be used. The effectiveness of
;r military forces in peacetime is of
tal importance to the avoidance of
eir employment in war. Our approach
is served us well; in the years since
orld War II, we have succeeded in
aintaining the nuclear balance and
,'terring nuclear war.

JBDtember 1984

Your countries and my country
threaten no one. Our military forces are
designed to keep the peace, and we are
proud of the job they have done. This
has called for a considerable effort to fill
some of the gaps that had developed in
the last decade, particularly in this
critical part of the world. President
Reagan is determined that those efforts
will continue.

The Challenge of Regional Stability

A second great challenge which faces us
all is achieving regional stability. This
task is every bit as critical as the effort
to control nuclear weapons, for the
greatest danger of nuclear war arises
from smaller wars that could get out of
control. The promotion of regional
stability thus serves global as well as
regional interests. The nations of every
region achieving stability meet not only
the deepest aspirations of their own peo-
ple; they also contribute importantly to
the avoidance of global conflict, nuclear
or conventional. We must never forget,
however, that so-called small wars, even
if contained within a region, have caused
devastating losses in recent decades.
Hundred of thousands of lives have been
lost, damaged, or dislocated in virtually
every quarter of the globe. We must ex-
pend every effort to turn energies that
are absorbed in conflict toward peace,
justice, and lasting stability.

The United States is proud of its
part in the system of regional alliances.
These alliances— backed by credible
military presence— have helped to main-
tain a remarkable degree of regional
stability, even in the face of shocks like
the Rangoon bombing which, in an
earlier age, might easily have led to war.
Our alliances with two of your members,
the Philippines and Thailand, contribute
to a stability which benefits the entire
region, and we are grateful for their
contribution. We recognize as well the
responsible self-defense efforts of the
nonaligned members of ASEAN.

The principles of realism, strength,
and diplomacy are the keys to progress
in regional disputes. These are the prin-
ciples the United States has been using
in its Central America policy. We seek
and we support a regional solution
there— one that the nations most
threatened by the conflict agreed upon
in their meeting at San Jose, Costa
Rica. That objective is now embodied in
the 21 principles developed in the Con-
tadora process. Behind a strengthened
security shield, this approach can pro-
vide development, democracy, and an
end to attempts to achieve hegemony in

that region via Cuban and Soviet in-
tervention.

The policy ASEAN has adopted in
dealing with the problem of Vietnam's
occupation of Kampuchea reflects these
same principles. Realism leads you to
recognize that Vietnam's occupation of
Kampuchea threatens the entire region
and that no one is safe if such acts of
blatant aggression succeed. You recog-
nize the need for strength— political and
economic as well as military— to con-
front Vietnam with the clear choice be-
tween bearing the burdens of aggression
or enjoying the benefits of cooperation
with ASEAN and with countries, like
my own, that firmly support you. You
have offered Vietnam a realistic pro-
posal for a negotiated political solution,
one based on the restoration of Kam-
puchea's sovereignty and the rights of
its people to choose their own govern-
ment. Such a solution safeguards the in-
terests of the Khmer people and of all
Kampuchea's neighbors.

Your appeal to Vietnam is based not
only on what is right, but also on what
would serve Vietnam's own best in-
terest—if Vietnam would only see its
long-term interests more clearly. The
regional tensions which Hanoi causes
work to its own disadvantage. Vietnam
is disastrously diverting its resources
from its own development and the
welfare of its energetic and talented
people. Compared with the relationship
Hanoi could have with the rest of the
world— with access to markets, new
technologies, and foreign assistance, as
well as greatly increased diplomatic op-
tions—Vietnam's present isolation,
resulting from its occupation of Kam-
puchea, imposes a cruel burden on its
own people.

No Vietnamese proposal to date has
addressed the underlying issues-
withdrawal of Vietnamese forces and
creation of a government in Phnom
Penh chosen by the Khmer people
themselves. It is a given, I think we all
agree, that free choice by the Khmer
people would not result in a return to
power of the Khmer Rouge. None of us
wish such an outcome. A Kampuchean
government responsive to the Khmer
people and to the urgent need for na-
tional reconstruction would be a threat
to no one and would contribute to the
kind of stability so important to
Southeast Asia.

I want to convey America's admira-
tion for what has been achieved by
ASEAN in obtaining international sup-
port for a just settlement in Kampuchea.

THE SECRETARY

We will continue to do our part, in-
cluding moral, political, and humani-
tarian support for the organization ed
bj Prince Sihanouk and Son Sann. We
will give no support to the Khmer
Rouge, whose atrocities outraged the
world.

While we are discussing Vietnam, let
me reemphasize that an accounting of
Americans missing in action from the
conflict in Indochina is a matter of the
highest priority for the Unites States.
The United States has both a legal and
moral responsibility to obtain the fullest
possible accounting of almost 2,500 of
our men still missing. The American
people rightfully expect no less. We
deeply appreciate the support you have
given us with Vietnam on this problem.
It is a problem which demands mean-
ingful cooperation and progress before
the American people will permit discus-
sion of normalization with the Viet-
namese, even in the context of a Kam-
puchea settlement.

It is, therefore, in the interest of all
of us to persuade Hanoi to come for-
ward rapidly. It is the humane thing to
do. The longer this issue lingers, the
deeper will be the resentment of the
American people. That serves no one's
interests and thwarts the goal we all
share of moving beyond the tragic
history of Indochina to a more hopeful
and constructive future. We appreciate
the recently announced repatriation of
remains. We call on Vietnam in a
humanitarian spirit to meet the com-
mitments it made to us recently and ac-
celerate its efforts to resolve the issue.
Resolution of this sensitive problem
would be greeted as a significant and
positive step by the American people
and would establish a precedent for
future cooperation.

Still another tragedy is the large and
continuing flow of people fleeing Viet-
namese repression and aggression. Our
joint efforts on the refugee issue provide
a remarkable example of international

iteration, involving ASEAN, the
United States, and other countries
whose humanitarian principles have led
them to assist in coping with this cruel
tragedy. Thailand, which has borne the
biggest burden of first asylum, has
responded magnificently in providing a
haven for close to two-thirds of a million
refugees. Malaysia, Indonesia, and the
Philippines also have made major con-
he alleviation of human
ring by providing temporary
asylum ,sing facilities. The en-

utcrnational community applauds

you for your unceasing efforts in dealing
with this problem, which was caused by
Vietnam and imposed upon you.

The United States is proud of the
part it has played in resettling Indo-
chinese refugees. Of the 1.37 million
refugees who have been resettled
around the world since 1975, 650,000—
almost one-half of the entire total— have
been resettled in the United States. Ab-
sorbing such numbers can never be easy,
but we are proud to have these refugees
come to our shores. Ours is a nation
built by people seeking freedom from
tyranny. Our country is enriched by the
energies and talents of the Vietnamese
and other Southeast Asian refugees.
Other nations represented at this
conference have also played their part.
In fact, the entire refugee resettlement
process, from first asylum to final reset-
tlement, represents international
cooperation at its finest. If we are to
maintain the cooperative nature of this
endeavor, all of us must continue to
shoulder our share of the burden. We in
the United States will do so, and we
urge others to do so as well.

One of the tragic effects of the
movement of people seeking refuge has
been an increase in piracy. Although the
number of vicious attacks on helpless
refugees— including women and
children— has declined, it is still a terri-
ble risk to run for those seeking
freedom. I know that all ASEAN
governments condemn these acts of
piracy and are anxious to find ways to
combat this problem. We stand ready to
help in any way possible.

The Challenge of Economic
Development

We face a third great challenge in con-
cert with all members of the interna-
tional community— economic develop-
ment. All the leaders of ASEAN have
made economic development a major
goal, and it has become a central part of
the U.S. -ASEAN relationship. But we
are all part of a world economy so our
efforts must extend beyond the confines
of the U.S.-ASEAN relationship.

Prior to the recent London economic
summit, [Indonesian] Foreign Minister
Mochtar wrote me and others in his
capacity as chairman of the ASEAN
Standing Committee, asking me to bear
in mind the concerns of the ASEAN
countries as the summit leaders ad-
dressed global economic issues. It should
be clear from the outcome of that sum-
mit that ASEAN's concerns were very
much on our minds.

Trade Issues. The first topic
Foreign Minister Mochtar addressed
was trade. We share the view that trac
is a major engine of the development
process. Trade liberalization is an in-
dispensable element in ensuring that th
global recovery will endure and spread
We worked hard to see that the summi
declaration urged formal movement on
new GATT [General Agreement on
Tariffs and Trade] trade round. In our
judgment, a new round will stimulate
confidence in the recovery and can offc
the prospect of significant benefits to
the developing world.

A key objective of a new trade
round will be to confront the protec-
tionist pressures that afflict all of us,
developed and developing countries
alike. On this point, I am sure we are i
full agreement. We may disagree,
however, on the extent of protectionisi
now being provided our respective in-
dustries.

The United States is frequently ac-
cused of bowing to protectionist pres-
sures to the detriment of the developir
world. Examples often cited are textik
shoes, and steel. We do face pro-
tectionist pressure, and occasionally w
are forced to limit the growth of impo;
of some products. I note with pride,
however, that the U.S. economy is a
genuinely open one, and this openness
of great benefit to developing countrie
The United States is the world's bigge
market for the manufactured exports
developing countries, taking over 50%
such exports to all industrial countries
Even in sensitive industries where pre
tectionist pressure is high, imports ha
continued to grow, often exceeding th>
growth in total output in that industry

The complaint heard most concerr
textiles. But during the first 4 months
1984, textile imports to the United
States are 50% above the same period
1983; in the case of the ASEAN coun-
tries, the figure is 107%. A rate of in-
crease like that in a sensitive America
industry causes us real problems and
brings an understandable reaction in t
United States. But the increases are
there, nonetheless. The United States
has an open market. Imports are a pe
manent part of our economic life and
welcome the benefits they bring.

Protectionism is a danger we all
must combat. IMF [International
Monetary Fund] studies have made ck-
the damage that high levels of protec-
tionism have caused to certain develop
ing countries. I agree with those who
have raised objections to proposals in
the United States for local content

Department of State Bulle

THE SECRETARY

jislation. President Reagan's Ad-
inistration is vigorously opposed to
ch laws but the principle of realism is
quired here as well, for this is a prac-
:e widespread in the developing as well
developed worlds. Nor can we ignore
e reality that the average tariff level
the developing countries is 30% com-
ired to 4.7% in developed countries.

A trade issue of particular concern
the United States is infringement of
tellectual property rights. American
isinesses lose hundreds of millions of
liars annually due to the counter-
iting and piracy of records, tapes, and
her intellectual property. But the even
gger losers are those nations who fail
offer protection to intellectual prop-
j ty. America's high-technology com-
.nies— for example, in computers and
I mputer software— are not going to
I ant to invest in countries where their
tellectual property can be stolen with
ijipunity. This will result in a loss to
lose countries of the types of skills
:-eded to develop a modern industrial
Ictor with well-educated, high paid,
1 illed workers. This is an issue that
ncerns us all and which must be ad-
tessed quickly.

Growth in the industrial democracies
») crucial to the trade and thus to the

onomies of the developing world
M id— I wish to emphasize— vice versa,
leal output in non-oil-producing develop-
.. g countries is expected to rise 3.5%
I is year, compared to 1.6% last year. A
i ajor part of this recovery is due to the
I crease in world trade. Achievement of
. stained noninflationary growth in the

nited States and maintenance of our
I >en markets are of prime importance
I the developing world. Conversely,
. SEAN's prosperity has created new
arkets and enhanced investment op-
irtunities for American business.
The strong growth of U.S. import
, } ;mand has been the major factor in the
j'covery of world trade, with U.S. im-
j >rts up 13% in 1983 and an estimated
i i% for 1984. In the case of ASEAN,
i creased exports to the United States
• •counted for over 60% of ASEAN's
Iital export increase in 1983. These
lercentages are pretty big in anybody's
linns, but in terms of ASEAN's
:onomies they are huge, for the
merican economy is truly enormous.

Commodity Agreements. The sec-
id issue mentioned by Foreign Minister
:ochtar on behalf of the ASEAN coun-
ties was commodities. In practice, com-
lodity agreements often interfere with
mrket forces to the detriment of ra-
onal long-term allocation of capital,

■u
nd

loi

■ie

land, and labor. Bearing these dif-
ferences in mind, however, we may be
able to turn to negotiation along
avenues that can lead to practical and
economically productive areas of agree-
ment.

The International Rubber Agree-
ment is one commodity arrangement
that we both are able to support. We an-
ticipate that negotiations to renew this
agreement will proceed in a good-faith
manner. Another example is the
U.S-ASEAN memorandum of under-
standing on tin that we concluded late
last year, directly as a result of the
ASEAN dialogue meeting. We intend to
follow the same precepts of realism and
diplomacy in examining other commodi-
ty issues.

Debt and Finance. The third and
fourth topics in Foreign Minister
Mochtar's letter were debt and finance.
Here the London summit participants
agreed that their strategy for dealing
with the international debt crisis is
working as intended. One of the lessons
we have learned in recent years is that
over-reliance on foreign borrowing to
finance development can lead to suc-
cessively complex problems, especially
during an economic downturn. I want to
underscore the Williamsburg and Lon-
don declarations' recognition of the im-
portance of private capital flows to the
developing world. Private equity funds
can provide an important complement to
domestic savings, while avoiding the pit-
falls that come with large amounts of
foreign debt. Furthermore, as the Lon-
don summit recognized, foreign direct
investment "carries the advantage of be-
ing tied to productive capital formation,
as well as forming part of the package
that includes the transfer of technology
and skills." Countries, just as companies,
must pay attention to their debt-to-
equity ratio. The ASEAN countries you
represent have been wise in pursuing,
for the most part, sensible strategies of
foreign borrowing. The United States
stands ready to work with you to im-
prove the climate for increased foreign
equity flows. For example, we are
prepared to enter into discussions about
treaties for encouraging and protecting
investment.

Another aspect of the financial side
of cooperation is development assist-
ance. While it can never match trade or
private foreign investment— let alone in-
vestment based on domestic savings— in
terms of its impact on the recipient

country, it can play a crucial catalytic
role, particularly for the poorest coun-
tries. U.S. assistance to the developing
world exceeds that of any OECD
[Organization for Economic Cooperation
and Development] country. In fiscal year
(FY) 1983, the United States provided
$249 million in bilateral economic
assistance to ASEAN countries.
Together with security assistance, our
total bilateral aid was $424 million.
When one adds in our share of
World Bank and Asian Development
Bank loans to the ASEAN countries,
total U.S. assistance in FY 1983 ex-
ceeded $1 billion. We are the largest
participant in the major international
financial institutions. We will maintain
these flows to the extent that our
budgetary conditions permit and we will
continue to support the programs
directed toward ASEAN of the IMF, the
World Bank, and the ASEAN Develop-
ment Bank.

North/South Dialogue. Mr.

Mochtar's fifth point addressed the
North/South dialogue. We believe in
dialogue; that is why we are here. That
is why we support substantive work in
the GATT, IMF, the World Bank, the
Asian Development Bank, the African
Development Bank, the Inter-American
Development Bank, and other similar in-
stitutions. The forums for the dialogue
exist. The institutions for carrying out
programs exist. What we must find are
practical solutions, working in those
forums where constructive action can be
taken.

U.S.-ASEAN Relations

Each time I return to this region I am
impressed anew with the sense of
dynamism I encounter. ASEAN's record
of progress over the past decade has
been phenomenal. Your average real an-
nual growth is the envy of the rest of
the world— developed and developing.
Your growth in trade with the rest of
the world in the last decade was more
than twice that of overall world trade.
Your exports have grown from $14
billion to over $70 billion in the same
period— a most impressive record. Com-
plementing the dynamism of the region
is its stability. Much of the developing
world must grapple with rapid and un-
controlled change that threatens political
and economic institutions. But the coun-
tries of this region have become models
for balancing stability with controlled
and beneficial change.

On this visit, I have been reminded
again how our host government, under
President Soeharto's leadership, has

eDtember 1984

THE SECRETARY

drawn on the traditional Indonesian
values of consultation and consensu ; 1 1
net a stability that stands in si ark
contrast to the turmoil that followed the
1945 revolution. In Malaysia, 1 saw a
vibrant parliamentary democracy at
work, a political system thai demon-
strates that people from different ethnic
groups can work together in harmony to
forge a nation. In Singapore, I saw how
imaginative leadership combined with
the principles of free enterprise can
overcome the shortage of natural
resources. The Philippines, although still
beset by serious financial difficulties,
recently held important legislative elec-
tions, which showed the Filipinos' deep
commitment to the democratic process. I
have been heartened by Thailand's im-
pressive political stability and deepened
cooperation with my country. And
Deputy Secretary Dam felt the promise
of Brunei as it celebrated its in-
dependence this year.

Today, there is a growing awareness
of Asia's importance to the United
States. East Asia's rapid economic
growth has had a profound impact on
our own economy. U.S. investment in
ASEAN, currently almost $8 billion, ac-
cording to recent Department of Com-
merce figures, continues to increase, as
American business sees new oppor-
tunities in ASEAN's expanding free-
market economies. The U.S. -ASEAN
Center for Technology Exchange pro-
vides an opportunity to promote the
transfer of technology from the United
States to ASEAN firms. America's an-
nual trade with East Asia and the
Pacific exceeds that with any other part
of the world— and has for 5 years.
ASEAN is now the fifth largest trading
partner of the United States— with total
trade exceeding $23 billion.

There is a deep human and cultural
dimension to our relations as well. This
year there are more than 40,000
students from ASEAN nations studying
in the United States and the number of
my countrymen who visit Southeast Asia
and become involved here continues to
rise. I, myself, visited this region often
as a private citizen and spread the word
of the new Southeast Asia to my friends
back home. Your societies, your his-
tories, your intellectual and artistic
achievements every year become more
familiar to Americans and contribute to
a lasting bond betw© hind each

statistic there are complex person-to-
person contacts that will link our lands
and peoples ever more closely in the

future.

Southeast Asia is an area that com-
mands U.S. attention within the
Asia/Pacific region. In recent years,
questions have been raised about the
firmness of American purpose in
Southeast Asia. Some feared that our
withdrawal from Vietnam would lead us
to abandon our interests in the region,
particulary in ASEAN. The prospect-
some years ago— of a withdrawal of U.S.
troops from Korea fed these fears.

Let me assure you that nothing
could be further from reality. U.S.
security interests are increasingly
engaged in Asia and the Pacific. We are
committed to an active, constructive,
and long-term presence in Southeast
Asia.

Our relations with the ASEAN coun-
tries are the cornerstone of our policy in
Southeast Asia. As the United States
develops and expands its relations with
other countries, both large and small, in
Asia and around the world, we will very
much keep in mind our strong ties with
the ASEAN region. We do not intend to
subordinate our interests in ASEAN to
the pursuit of better relations elsewhere.

U.S. relations with the ASEAN
region are based upon the perception
that we each have a constructive and
complementary role to play in dealing
with the challenges that confront us.
Your combined voices carry authority in
the international arena and contribute to
the quest for peace and economic justice.
Together we can make an impressive
contribution to the kind of world all our
peoples seek for the future.

Conclusion

In conclusion, let me say once again
what a pleasure it is to participate in
this dialogue with you. The discussions
we have had here symbolize the
dynamism and vibrancy of your coun-
tries. The inclusion in our agenda this
year of the theme of Pacific cooperation
reflects your vision of the opportunity
that the future offers to the Pacific
region. We share this vision and are
prepared to work with you to give it
substance. The success of ASEAN, both
as a regional organization and as in-
dividual countries, stands out as an
example for others everywhere. The
United States is proud to be associated
with our allies and friends in these joint
endeavors.

NEWS CONFERENCE,

CANBERRA,

JULY 15, 19844

First, I want to express my appreciatic
for the great hospitality shown me her
by the Prime Minister, and the Foreigr
Minister, and others in Australia. We
had a very fine working dinner and a
lengthy discussion last night, and agair
this morning a brief private meeting
with the Foreign Minister. The meetinj
this morning will continue on, so we
want to, all of us, express our apprecia
tion for this mark of cordiality. Of
course I'll be meeting with the Foreign
Minister further in New Zealand when
we get there tomorrow.

Q. The New Zealand Labor Part;
abides by its policy in banning nuclei
ships from New Zealand waters. Dot-
this mean the end of the ANZUS tres

ty?

A. 1 had the chance to talk briefly
on the telephone with the newly electa
Prime Minister [David Lange], and I e:
pect that we will have a chance to meei
He said that he was going out of his w
to come to Wellington, and we will ha\
a chance to discuss the situation. Then
a very warm feeling between the peopi
of the United States and, I think, the
people of New Zealand, and we will
work at the situation. I don't want to
prejudge it.

Q. This morning David Lange sa
on TV that his government would iir
plement his party's policy on bannin;
U.S. warships carrying nuclear
weapons from New Zealand ports, b
he said he did not believe that that
would jeopardize ANZUS. Would yo
accept that view?

A. As I said, I will have discussioi
with him. We'll have a meeting of the
ANZUS group, and we'll make our
statements as we go along in that set-
ting. I don't want to prejudge the situ;
tion.

Q. But do you express concern
over that New Zealand Labor Party
policy, whether or not it's put into e
feet? Do you express concern of the
policy itself?

A. ANZUS is an alliance. It is an
alliance in the light of the fact that th<
basic values of freedom, liberty, and tl
rule of law are shared by Australia, N
Zealand, and the United States, amonj
other countries in the world. And so w
recognize that there are threats to the
values and that we have to deter thest
threats. That is essentially the basis fc

THE SECRETARY

alliance. Now for an alliance to
,n anything, it has to be possible for
military forces of the respective

ntries to be able to interact together;

erwise it's not much of an alliance.

these are matters that we'll discuss

1, nevertheless, I think that's just a

tement of fact.

Q. Would you be asking for Mr.
yden to perhaps use whatever in-
ence he has on the New Zealand
bor Party to see the reality of the
(ZUS treaty?

A. Mr. Hayden and the Prime
lister, of course, will express
mselves from the standpoint of the
stralian view of matters, and we'll ex-
ss the U.S. view of matters. I think
t there's a great deal of good will on
sides of this issue, and we'll have to
•ceed and see what we can work out.

Q. If the New Zealand Govern-
nt does ban the warships, can we
eiiect to see more of them here in
Astralia?

A. I don't want to bite on the con-
lied speculation. I want to talk with
I new leader in New Zealand, and we
■m 1 work our way along on these issues.
f sn't want to engage in excessive
* culation.

Q. Do you expect to be able to
r olve the issue during the period of
tl ANZUS talks?

A. I think, first of all, the ANZUS
»cs take place among the governments
lit are in place in the United States,
1 stralia, and New Zealand. We will
h'ea chance to meet with members of
tl new government, but it hasn't
f. med itself yet. So this ANZUS
to eting, I think, comes at a good time

0 ;he sense that it affords us an oppor-
t ity to meet with a new government,
el. it is the old government that will be
ti government in place for this

n eting.

Q. As you've been aware, the

1 bor Party's national conference in

t s country has taken the decision to
8>p homeporting of American war-
's ps in the Australian ports. Is that a
Utter of concern?

i, A. We think that the way in which
!• ship visits and other aspects of our
lationship with Australia are basically
•very good shape and we have no
l>blems.

Q. Would the United States be
ntemplating changing the arrange-
■nts whereby it makes regular use of
istralian ports, particularly the Port

ptember 1984

of Fremantle in western Australia, as
a result of the decision that was taken
last week by the Labor Party con-
ference?

A. As far as I can see from the dis-
cussions that I've had here, and we'll
continue them, of course, the
U.S.-Australia leg of the ANZUS rela-
tionship is in very good shape. We have
a strong sharing of common values and
a sense of the importance of succeeding
in maintaining stability in the world and
a place where these values can flourish.
We share a common view that we must
maintain a deterrent capability.

Q. Do you think that this year's
ANZUS talks are slightly irrelevant,
given that they are taking place with
Mr. Muldoon and Mr. Cooper?
Shouldn't we really be discussing it
with the new Labor government?

A. I think it has fortuitously turned
out to be a good time to have this
conference because it gives us an oppor-
tunity to talk with a new government
and to hear their views and to express
our views so that these matters can be
considered before the new government
takes office and starts to take positions
as a government. So I think that it's
really a good time to be present in New
Zealand, and it gives us a chance to be
part of this transition that's under way.

Q. Is the United States worried
about Australia's depleted defense
capabilities and does the United
States believe that the balance of
power in the ASEAN region could be
destabilized because of a lack of
defense direction from Australia?

A. We think it's important for all
the countries in the various alliances
that we have to be looking to their
defense capabilities and seeing that they
are properly attended to. And, of
course, we struggle with that within the
United States.

President Reagan has wanted to re-
store the military balance and that has
meant spending a lot of money and on
the whole that has gone along suc-
cessfully. We have had some disappoint-
ments in the appropriations process, but
there has certainly been a major change
in the U.S. defense posture. We work on
this same problem with our NATO allies.
We talk about it, the responsibilities of
the Japanese and so on. So I think it's a
general proposition that we have to be
looking to our defense capabilities and
the same is true from the standpoint of
Australia.

I might say that we all recognize, on
the one hand, that the nuclear side of
strength is a key element in the deter-

rent, and at the same time we recognize
the importance of strength in conven-
tional forces and the importance of con-
ventional forces to the nuclear deter-
rent. It is the case, at the same time,
that conventional forces are expensive
and so that fact means that you
recognize the significance of improve-
ment in conventional capability; you also
have to be recognizing that it's going to
cost you some money.

Q. Does that mean you are con-
cerned about Australia's [inaudible]
defense capability?

A. We are concerned about
anything less than adequate all around
the world, including with ourselves, and
so we are trying to bring about — others
are working with us — attention to what
the capabilities are. And I don't single
out any one country. I just say that we
all need to be looking to our capabilities
and strengthening them; recognizing,
ironically, that it is through strengthen-
ing them that we lessen the chance that
they would ever be used.

Q. Does the United States regard
Australia's defense capabilities as ade-
quate or not?

A. We have an alliance with
Australia, as I have said, we feel that
there is work to be done on the part of
the United States, on the part of
Australia, on the part of NATO, on the
part of Japan, on the part of people who
are standing for freedom and democracy
all over the world. We have to be ready
to defend these values, and having
strength is the best insurance that we
can have that the strength will not need
to be used. So it isn't simply a problem
for Australia. It's a problem for all of
us, and all of us working together in our
respective alliances.

Q. Congresswoman Ferraro has
charged that President Reagan cannot
claim one single foreign policy suc-
cess. I am wondering if you would
like to respond to that.

A. Oh, I'm not going to get into a
debate with Congresswoman Ferraro,
but I think that, as a general proposi-
tion, the standing of the United States
in the world has been immeasurably
strengthened during the Reagan Ad-
ministration. Here we are in the
Australia-New Zealand area, and having
just come from a meeting with the
ASEAN countries, and earlier this year
the President has visited Japan and
Korea and China, so if you look at this
part of the world, we have very strong
relationships here. And the same can be

THE SECRETARY

said as you look around the world more
generally. So there are many problems,
they are being addressed in a strong and
creative way, and I think the United
States is in very good shape.

Q. This is what they call in
American journalism a "so-what" ques-
tion. If the ANZUS alliance is not
functioning effectively, what dif-
ference does it make beyond the
shared values and so forth?

A. Shared values and so forth are
not a "so-what" question. The impor-
tance of freedom tends to be taken for
granted in the United States, in
Australia, in New Zealand, in many
[iarts of Europe, and in places that have
had it and consider it normal, like
breathing the air.

But it's very dramatic to talk to peo-
ple who are in a country that hasn't had
it. For example, this past year, I've had
a chance to visit with the leaders of
Spain and Portugal, and particularly I
remember visiting with Prime Minister
Suarez just as he returned from the in-
auguration of President Alfonsin in
Argentina. And he was commenting
upon how wonderful it is to have free-
dom. So, I think that freedom can't be
put down as a "so-what" proposition. It
needs to be attended to everywhere, and
people need to address themselves to the
importance of this value and the fact
that it is under attack. If we're going to
keep it, we have to be ready to deter ag-
gression against it.

Q. Are you suggesting that if the
ANZUS pact is not effectively work-
ing, Australia and New Zealand would
lose their freedom?

A. It is part of an overall proposi-
tion, and the all-or-nothing approach
suggested by your question, I don't think
is appropriate. Rut at the same time, if
we lose some deterrent capability, that
increases the margin for error, and we
shouldn't do it.

Q. There are reports from
Washington, somewhat ambiguous,
that the United States has told the
Soviet Union in regard to these
discussions on space weapons that it
would be prepared to delay these talks
until after the elections if that suited
the Soviet Union. Can you amplify this
in any way'.'

A. The Soviet Union suggested that
these talks take place in Vienna in the
middle of September, and we have said

Ae'N be there. There i,:lVe also been

lots of qui ised by them, and

they keep talking about our election. We

we talk

about the importance of arms control at
any season of the year. So we don't
want to delay these talks, but if for
some reason they can't conveniently be
arranged at the time set, and there's a
desire to somehow have them take place
after the election, then they'll take place
after the election. But our desire is to
have them take place in September, as
was originally set, but we're not going to
sort of hang on that. On the contrary,
our interest is in getting them going and
getting them going in a constructive
way as soon as possible.

Q. Our Foreign Minister just re-
turned from Moscow a month ago. Did
you discuss that with him and, if so,
did you gain any useful perceptions or
information?

A. The Foreign Minister had a very
interesting trip to the Soviet Union, not
just in Moscow, and he provided us a
good read-out from the trip after it was
completed. I've had a chance to talk with
him further about it on this visit, and I
hope that I'll have chances for some fur-
ther exchanges as we're together over
the next few days. I think it's a very
valuable thing that he went and got his
own impressions and was able to provide
those to us. It's part of the continuing
dialogue, you might say, of the West
with the Soviet Union. And each piece
of it is of importance. His visit was quite
a worthwhile one, and we're very grate-
ful to him for being willing to share with
us his own thoughts and his experiences
there.

Q. While in Jakarta, did you raise
the question of human rights in princi-
ple?

A. Yes.

Q. Did you present a letter to the
Indonesian Government from your
U.S. Congressmen expressing concern
about human rights? If not, why not?

A. I'm from the Administration, and
I expressed our concern and there are
also things that we are trying to do that
we think are helpful on East Timor. We
believe that the best way to be helpful
and to try to make a constructive con-
tribution is to do it quietly in diplomatic
channels and at the same time be ready
to do things that may help people in
East Timor and provide access to the
situation. Those are the lines along
which we have been working.

REMARKS,
WELLINGTON,
JULY 16, 19845

It is a great pleasure for me to welcome
Foreign Ministers Cooper and Hayden
and the members of their delegations to
our Embassy. I believe our first session
this morning went very well, and I look
forward to continuing in the same spirit
during the remainder of the council
meeting.

We, of course, have had a very closi
partnership with the existing and all
previous New Zealand Governments
and, in the spirit which has character
ized our dealings with New Zealand ove
many years, we hope to continue in
partnership with the new government.

My visits to Australia and New
Zealand come at a time when the con-
tinued strength of the alliance has neve
been more critical to stability in the
Pacific. Soviet naval activity in the
Pacific, supported by the growing Soviet
air and naval presence on the Pacific
rim, continues to increase, probing for
weak or vulnerable areas into which it
can expand. Our ANZUS solidarity, I
believe, has been critical to the failure c
the Soviets to project their influence in-
to the Southwest Pacific, particularly
among the new island states of the
region.

But should the ANZUS resolve evei
weaken, should we ever allow our atter
tion to be diverted from potentially
destabilizing activities by indecision or ;
belief that opting out of the alliance will
decrease the dangers we might face,
then I believe we will have handed our
adversaries a windfall by default. Our
unity is the best deterrence we have, tl
least expensive, and most effective way
we have of convincing any potential
adversary that we will always stand
together. That is why we stand
together, just as the United States
stands with our European allies in
NATO. Both alliances are communities j
of nations, bounded by shared
democratic traditions, which have volur
tarily linked their peoples and institu-
tions into a strong chain of deterrence
against anyone who would dominate us
But as with any chain, we must ensure
that all the links are sturdy and in gooc
repair.

And I think that is why we are hen
in Wellington these 2 days, reviewing,
as we have every year for 33 years, oui
Pacific end of the chain, to ensure that
we understand each other and our view'
on mutual defense and other important
global and regional matters. But equall;

Department of State Bullet

THE SECRETARY

iortant, we meet to deepen that sense
onutual trust which has always
aracterized our relations and without
Mich any community of nations united
keek a common goal cannot survive. I
I optimistic that we will succeed.
|] In that spirit, I would like to pro-
Ae a toast to Her Majesty Queen
izabeth II, Queen of New Zealand and
■■Australia.

ZUS COMMUNIQUE,
LY 17, 1984

33rd meeting of the ANZUS Council
i place in Wellington on 16 and 17 July
4. The United States Secretary of State,
•rge Shultz, the Australian Minister for
eign Affairs, Bill Hayden, and Minister
Defence, Gordon Scholes, and New
land's Minister of Foreign Affairs, War-
Cooper, and Minister of Defence, David
mson, represented their respective
ernments. During their visit the leaders
he United States and Australian delega-
s called on the Prime Minister, Rt. Hon.
Robert Muldoon, and Mr. David Lange,
'., Prime Minister elect.
2. Council members reaffirmed their
mitment to the maintenance of peace,
lility and democratic freedoms. They ex-
ssed their belief that the ANZUS partner-
based as it is on common traditions and
-ed interests, contributes to this. They
omed the increased exchanges that had
m place on political, economic, security
defense issues and agreed that defense
peration, including combined exercises,
;s and logistic support arrangements,
'ed an essential part in promoting mutual
nrity. Access by allied aircraft and ships
5C he airfields and ports of the ANZUS
% nbers was reaffirmed as essential to the
K :inuing effectiveness of the Alliance.
& 3. Council members reviewed a broad
m.*e of global issues and regional
Selopments of concern to the Alliance.
E se included the persistent Soviet arms
I d-up in the Pacific region as well as in

■ •ope; the need for early resumption of

■ is control negotiations; the continuing

I ression and occupation by Soviet forces in
J-hanistan; and Vietnam's occupation of
K npuchea.

•J 4. The Council members gave special at-
irion to arms control and disarmament

■ ies. They recognised that arms control

: eements which produced balanced, effec-
W. and verifiable reductions in armaments
'wAd assist in reducing international ten-

■ is and in strengthening international
larity. They agreed that the early conclu-
-lii of such agreements was of the highest

iwrtance. Among arms control measures, a
1 stantial reduction of nuclear weaponry to
Minced, more stable levels was of the
latest urgency. Council members expressed
Ci cern at the Soviet Union's refusal to
:lume the START [strategic arms reduction
-ics] and INF [intermediate-range nuclear

force] talks and called for the resumption of
those negotiations without delay. They en-
dorsed efforts by several countries, including
the United States and Australia, to establish
a political dialogue with the Soviet Union and
to make progress on arms control. The New
Zealand and Australian Council members
welcomed the readiness of the United States
to resume negotiations at any time and
without preconditions on reducing nuclear
weapons and its agreement to discuss effec-
tive and verifiable limits on anti-satellite
weapons with the Soviet Union.

5. The Council members reaffirmed their
strong commitment to preventing the pro-
liferation of nuclear weapons and agreed to
intensify their efforts to strengthen the inter-
national non-proliferation regime through
multilateral and bilateral measures. They
noted that the third Review Conference of
the Treaty on the Non-Proliferation of
Nuclear Weapons is to take place in 1985.
Progress in fulfilling all the Treaty com-
mitments, including Article VI which com-
mits parties to pursue negotiations in good
faith on effective measures relating to cessa-
tion of the nuclear arms race at an early
date, is important to the international non-
proliferation regime and the Review Con-
ference.

6. In this context they reaffirmed the
commitment of their governments to work
towards the goal of a comprehensive and
fully verifiable nuclear test ban treaty. They
expressed satisfaction that the Western
group of countries in the Conference on
Disarmament in Geneva had agreed on a
draft mandate for the Nuclear Test Ban Ad
Hoc Committee. They urged the conference
to move promptly to re-establish the Ad Hoc
Committee under this mandate.

7. The Australian and United States
members affirmed the important contribution
of the joint Australian/United States defence
facilities to arms control verification, effec-
tive deterrence, mutual security and main-
tenance of the stability of the strategic
balance.

8. The Australian and New Zealand Coun-
cil members indicated that they shared fully
the concerns of other countries of the South
Pacific region on nuclear issues, including
French nuclear testing. They gave an account
of the progress made in the discussions
among members of the South Pacific Forum
on a South Pacific Nuclear Free Zone. The
ANZUS partners also noted that the pro-
posed South Pacific Nuclear Free Zone would
be discussed further at the 1984 meeting of
the South Pacific Forum in Tuvalu.

9. The Council members agreed that a
convention to prohibit the development, pro-
duction, stockpiling, transfer and use of
chemical weapons, with adequate provisions
for compliance and verification, would be an
important disarmament measure. The use of
chemical weapons in the Iran/Iraq war and
evidence of their use elsewhere reinforced
the need for urgent conclusion of a conven-
tion to ban chemical weapons. The Australian
and New Zealand Council members welcomed
the recent initiative taken by the United
States Government in the Conference on Dis-
armament.

10. They noted the contribution to world
peace and security made by the Antarctic
Treaty which is the basis of international
cooperation in Antarctica and bans all
military activities and nuclear weapons there.
They expressed their continued commitment
to the Antarctic Treaty system.

11. The Council members agreed that the
political and strategic outlook would be great-
ly influenced by the economic environment
and that it was crucial to sustain the
economic recovery and to spread its benefits
more widely. Equally the debt problem which
many countries were facing needed to be
managed effectively. The threat to the world
trading system posed by the spread of protec-
tionist measures also needed to be resisted.
This was particularly so in the field of
agricultural trade which suffered from long-
standing protectionist measures and the
emergence of export subsidization on a scale
which threatened markets for many com-
modities.

12. Council members welcomed the em-
phasis placed by the major industrialised
countries at their recent Summit meeting in
London on the importance of global economic
interdependence and expressed the hope that
the recognition of this interdependence could
form the basis for future action. The impor-
tance of interdependence was nowhere more
evident than in relation to the debt problem
which required a careful and balanced ap-
proach. Economic adjustment in the debtor
countries was seen as an essential condition
for solving debt problems. At the same time
a cooperative approach was required from
the industrialised countries. Assistance to the
debtor countries had to be provided under
conditions that recognised the political and
social difficulties faced by these countries.
The increasingly important and central role
in the management of debt problems played
by the International Monetary Fund was
welcomed. Now that some of the most heavi-
ly indebted countries were undertaking the
first, necessary domestic adjustments, inter-
national attention was focusing increasingly
on longer-term changes that may be required
to strengthen the open trade and payments
system, with special attention being paid to
the closely linked problems of debt and trade.
The work being conducted on these issues by
a variety of groups reflected an encouraging
convergence of views. Council members con-
sidered that this had opened the way for
discussion and early agreement on practical
approaches to these issues.

13. The Council members reviewed devel-
opments in the South Pacific. They welcomed
the fact that the area remained one of peace
and cooperation and that it was firmly at-
tached to democratic systems and traditional
values. Change was being accommodated and
new opportunities were being taken up. The
independent and self-governing countries of
the region were strengthening relationships
with one another and with organisations and
countries outside the region that had con-
structive contributions to make.

14. Council members welcomed progress
towards self-government in the Trust Ter-
ritory of the Pacific Islands. They wanted to
see ratification on the Compact of Free

;«Dtember 1984

THE SECRETARY

•! and termination of the
Trusti d without delay and

panding their links with countries and
: the Pacific region.

15. < irnifi-

progress has been made in constitutional

ion in New Caledonia, but noted there
•leed for continued participation of all
nstitutional process. Peaceful
resolir lation in that territory

was of great concern to all countries in the
i d Council members noted that it was
important for France to maintain and expand
its dialogue with South Pacific Forum
members on this issue.

16. The Council members agreed on the
importance of effective regional institutions
in the area. They noted the major political

of the South Pacific Forum in which
Heads of Government of Island nations and
Australia and New Zealand were able to
work towards shared approaches on current
issues. Maritime matters, such as fisheries
cooperation and development, and possible
nuclear waste dumping were of major con-
cern to countries of the region. Council
members commended the valuable work be-
ing undertaken in these fields by the Forum
Fisheries Agency and the South Pacific
Regional Environmental Programme.
Members agreed they would continue sup-
porting and encouraging these regional
cooperative endeavors through financial con-
tributions or other means.

17. The Australian and New Zealand
Council members underlined the significance
of the 1982 Convention on the Law of the
Sea for the countries of the Pacific region
and tressed the importance of wide
adherence to it.

18. Recognising that political stability and
cooperation are underpinned by economic
security, Council members expressed admira-
tion for the resilience and good management
of Island nations which had, overall, enabled
Island nations to cope with the effects of
global economic recession and natural
disasters. They recognised nevertheless that
continued bilateral and regional aid. and en-
couragement of trade and investment were
essential to ensure the well-being of the peo-
ple of the area, and that such help would be
mutually beneficial.

I'1 < 'ouncil reaffirmed their

ork with the Governments of the
He Island countries in the interests of the
stability and security of the region. Australia
and New Zealand intend to maintain and
develop i heir bilateral defence cooperation
programme 1 assistance to, Island

rnments in fields such as maritin
surveillance, civil action, emergency and
and trainin ited

II continue to provide
m these areas.

i-l New Zealand
members provided detai

the main-
•v and stab
New Zealand member explained thai
impleted in

placed greater emphasis on the role of the
New Zealand Armed Services to provide
assistance if requested to South Pacific coun-
tries. The Australian member informed the
( ouncil that the Australian Government's of-
fer to develop a Pacific patrol boat to meet
the Island countries' expressed maritime
surveillance needs had been accepted by
several South Pacific countries.

21. Council members emphasised their
continuing support for the Association of
South East Asian Nations and welcomed the
contribution ASEAN makes towards the
stability and economic progress of the region.
The Council members also noted the increas-
ing significance of their own economic and
political links with the ASEAN countries.

22. Council members expressed full sup-
port for the principles adopted by ASEAN in
the search for a lasting settlement in Kam-
puchea. They reaffirmed their conviction that
the conflict in Kampuchea should be settled
by peaceful means. They agreed that a
negotiated settlement should be based on
respect for the independence, sovereignty
and territorial integrity of Kampuchea,
should take into account the desirability of
national reconciliation and should recognise
the legitimate security interest of all parties
concerned. To this end, they again urged the
early withdrawal of Vietnamese troops under
conditions that would allow for a peaceful
transition and a comprehensive settlement
which would enable the Khmer people freely
to decide their own future. Members wel-
comed the continuing humanitarian assistance
offered by the international community to the
Khmer people.

23. Council members' trade within the
Asian/Pacific region is now larger than with
any other group of countries. This reflected
not only the continuing strong growth in
their trade with Northeast Asia, but also an
increasingly dynamic element in economic
relations with the ASEAN countries. They
agreed that, the growing strength of trade
and investment ties with ASEAN reinforced
the importance of political relationships.

24. Recent visits by President Reagan
and Prime Minister Hawke to China were
discussed. The Council members agreed that
China's continued commitment to modernisa-
tion and to constructive relations with others
in the region was a positive development
which should be encouraged.

25. The Council members welcomed the
steps taken by Japan to move towards
liberalising access to its market and ex-
pressed the hope that this process would be
maintained and accelerated to the benefit of
international trade as a whole. The Council
members noted the strengthening of Japan's
ties with the nations of Southeast Asia and
the South Pacific, including its contribution in
the field of development assistance. They also
noted Japan's commitment to an enhanced
capability for self-defense purposes.

2ti. Council member: reaffirmed their
commitment to the sovereignty and in-
dependence of the Republic of Korea. They
called upon the Democratic People's Republic
of Korea to renounce its policies of hostility

towards the Republic of Korea, as evidence*
by last year's bombing in Rangoon, and to a
cept proposals aimed at reducing tensions aj
the Peninsula through the implementation o
practical confidence-building measures. The
Council members reaffirmed their view that
direct negotiations between the two Koreas
provides the only realistic basis for a durabl
reconciliation. Noting that a reduction of tet
sions would considerably enhance regional
security, they called upon the Democratic
People's Republic of Korea to enter into
negotiations with the Republic of Korea as
genuinely equal participant.

27. Council members reaffirmed their oi
position to the continued Soviet occupation
Afghanistan and condemned the recent
Soviet offensive which had caused con-
siderable suffering and loss of life among tr1
Afghan people. Council members called on
the Soviet Union to withdraw its forces in i
cordance with successive United Nations
resolutions.

28. Council members exchanged views <
developments in the Indian Ocean region at
noted the strategic significance of the regio
The Australian Council member informed tl
meeting that the Australian Government hj
adopted guidelines for a comprehensive ano
integrated approach to Indian Ocean issues
which included support for an Indian Ocean
Zone of Peace.

29. The Council members expressed th«
concern at the serious loss of life and the ri
to peace and security in the Gulf resulting
from continuation of the war between Iran
and Iraq. They deplored all attacks on ship
ping in the area and called on both countri*
to respect the right of free navigation for £■
non-belligerent shipping. They expressed
their support for the security and territorij
integrity of all states in the area, in accord
ance with the Charter of the United Natior
The Council members also urged Iran and
Iraq to act with restraint and expressed th
hope that the two countries would seek wa
of bringing the conflict to an end and resto
ing peace to this area.

30. It was agreed that the next Council
meeting would take place in Canberra in
1985 at a date to be decided.

JOINT NEWS CONFERENCE.

WELLINGTON,

JULY 17, 19846

Foreign Minister Cooper. Before I

open the news conference, I should sa;
just that as chairman, we have had a
very good discussion in regard to
ANZUS. Obviously, in the circurnstarj
one would have believed going into th<
conference, it was difficult to approacl
the issues. We did approach the issues
that were before us, and I believe that
has been very beneficial. There are sot
issues that, as the outgoing Minister o
Foreign Affairs, I did not promote or
provoke. The questions that I believe
you are going to ask should be substai

Department of State Bulle :.

THE SECRETARY

and directed to all elements of
ZUS; not just the particular issue
it you may think is the only thing in
JZUS. However, knowing the news
dia, you will ask what you wish to. I
w hand the news conference over to
j people. Welcome. It's nice to see a
group of people trying to give to the
)ple of the Western alliance — and
ibably the Eastern bloc — but par-
ularly Australia, New Zealand, and
lerica more news of what we have
m talking about here in Wellington in
s rather inclement weather.

Q. The communique seems to give
a'airly clear indication to the incom-
iir labor government of the ANZUS
prtners' attitude to ship visits. What
mil Mr. Hawke be telling Mr. Lange,
ad what will you be telling Mr.
Inge of the Australian Labor Party's
«'W on it?

Foreign Minister Hayden. I don't
jaw what Mr. Hawke will be telling
t: Lange. You will have to ask him,
ad if I discuss anything with Mr.
Inge, it will be a private discussion. I
m uldn't propose to discuss that public-
1

Q. Would you say that you are ir-
r ated at the current labor policy?

Foreign Minister Hayden. I leave
t ! Labor Party of New Zealand to
t /elop its own policy just as we develop
C rs. While we are fraternally asso-
I ted to the Socialist International and
I ve many sentiments commonly shared
i :ause we are both Labor Parties and
i i countries which are close to one
i other — and not just geographic-
ly — we nonetheless are quite separate
< d independent entities.

Q. What would you think would be
1 e effect on your antinuclear lobby in
j istralia on a nuclear-free New
I aland?

Foreign Minister Hayden. I'm not a
) ;mber of the antinuclear lobby in
i istralia. On the contrary. So it's not
I ach good asking me what they might
link.

Q. Will they take strength from a
nclear-free New Zealand?

Foreign Minister Hayden. I've just

I plained to you, it's not much good ask-
Ig me. I'm rather prejudiced in views
|> that particular subject. You'd better
Ilk them.

Q. If the Labor Party does carry
"it its policy of banning the visits of
iclear ships here, would it be the
id of ANZUS?

Secretary Shultz. We'll have to see
what happens. And I think it's better to
stay away from iffy questions, to state
our positions clearly, and to work with
the new government and see if we can't
resolve the problem satisfactorily.

Q. In Washington last year, the
treaty partners noted the importance
of the visits of ships and aircraft to
the treaty partners. This year all of
the sudden, it is "essential." I was
wondering what has happened in the
last 12 months to bring about such a
change of emphasis.

Secretary Shultz. I think it's just a
question of people looking for different
words. It's obviously essential to any
alliance that military forces of the coun-
tries involved be able to have contact
with each other, and that's as true today
as it has been for 33 years.

Foreign Minister Hayden. If you
look at that, I think that it is referring
to a nuclear-free South Pacific, and in a
different context. I think if you look at
what I said in 1982 when the issue of
ship visits arose in Australia, when I
was leader of the opposition, we made a
rather unsteady start, but we estab-
lished beyond any doubt what our posi-
tion was within a few weeks. And that
was that we recognized that, as far as
Australia was concerned, ships visits
were essential.

In respect of aircraft, we allow air-
craft visits. There are special arrange-
ments in respect of B-52s. That is quite
implicit in the last sentence of the sec-
ond paragraph of page one. At the na-
tional conference of the Labor Party last
week, the principles I've just outlined to
you were principles I staunchly pre-
sented and successfully defended. So the
attitudes of the Labor Party in these
respects has been on the table for some
time and adhered to.

Q. Between 1964 and 1976, suc-
cessive governments in New Zea-
land— Conservative and Labor —
banned visits of nuclear ships. In that
same period, for a considerable time,
successive Australian Governments
did the same thing. Why is it now, in
the words of the communique, essen-
tial to the continuing effectiveness of
ANZUS?

Secretary Shultz. I don't think that
your initial proposition is precisely right.
At the same time, nuclear-powered ships
are becoming more and more common,
because it is the efficient way in which
to power many kinds of ships and sub-
marines. So they are much more impor-
tant in the total fleet structure than
they were at one time. If you say you
ban nuclear-powered ships, you are

referring to a high proportion of the
total ships. Beyond that, you shy away
from the weapon that has provided the
main deterrent and has kept the peace
against the Soviet Union's very large
nuclear arsenal. So this is part and
parcel of what it takes to keep the
peace. These are peacekeeping forces,
and they represent a substantial fraction
of the total.

Q. Is it or is it not essential that
your ships be allowed into member na-
tion ports for the continuation of the
ANZUS treaty?

Secretary Shultz. Of course. What
kind of an alliance is it that military
forces of the countries involved are not
able to be in contact with each other?
Let me ask you to turn the proposition
around. In my many visits to this part of
the world, I'm thinking back 5, 6, and 7
years ago, people often tackled me, say-
ing, "Is the United States ready to pay
the attention to this part of the world
that it should? Why don't we see more
evidence of U.S. interest? Why don't we
see more people here? Why don't we see
more of your military presence here to
show us that you are really involved?"
You have to ask yourself what kind of
an alliance would it be if the United
States said we wouldn't send our
military forces to this area. The whole
point of the alliance is that it is a secu-
rity alliance. The whole part of it is that
if one of our countries gets in serious
trouble, as reflected in the alliance, we
will help each other. That help takes
many forms but the essence of it is
security; that is what it's about.

Q. There have been suggestions
from visiting Congressmen that,
should New Zealand ban nuclear ship
visits, this could well invoke trade
sanctions in the United States against
New Zealand export. Is that the policy
of the government that you represent?

Secretary Shultz. No, it isn't. The
ANZUS alliance is a security and
military alliance. That's what we are
discussing here. The relationship be-
tween the people of New Zealand and
the people of the United States is over a
century and a half old. It's been a warm
and deep relationship for a long time,
and it will continue that way. We look
forward to working in a cooperative
manner with the new Government of
New Zealand and any Government of
New Zealand that comes along.

Q. Are you able to broaden the
scope of ANZUS to make it much
more of an economic agreement?

sptember 1984

THE SECRETARY

Secretary Shultz. No. ANZUS is
not an economic agreement in any
sense. It is a security agreement. That is
the extent of it— that is the sum ami
substance of it— and economic arrange-
ments and cultural arrangements and all
sorts of other ways in which our coun-
tries are in contact with each other are
separate matters.

Q. You referred yesterday to a
resolute commitment, such as that em-
bodied in the ANZUS treaty, to come
to the defense of a valued ally. If the
New Zealand Government carried out
its policy of banning nuclear weapons,
does that mean that the United States
would no longer come to the defense
of New Zealand in a controversy.

Secretary Shultz. I have just said at
least once that I'm not going to get in-
volved in iffy questions. We have some
problems here, and we will work at
them, and I think some discussion is
called for. There are a lot of aspects to
this matter that need to be studied by
any new government, I know. I found
myself when I entered government that
there were a lot of things I found out
about that I didn't know when I was not
in the government that represent impor-
tant aspects of this relationship. So at
any rate, I think what is called for here
is some patience, and we'll try to work
our way through these problems.

I might take notice of the fact that a
year ago there was a new Australian
Government, we took the same approach
with the new Australian Government.
We had a thorough review of the
ANZUS alliance. We had a long and
searching meeting in Washington with
Foreign Minister Hayden. We had
discussions with Prime Minister Hawke
in Washington, and I've met with him
here. The problems have been worked
out in a very satisfactory way. The
Labor Government in Australia has
adapted it to its needs, and I think it is
stronger than ever insofar as Australia
is concerned. We'll work at it in connec-
tion with New Zealand in the same way.

Q. You talked about review with
Australia. Would you consider
renegotiations as the New Zealand
Labor Party's policy suggests?

Secretary Shultz. I don't think
there is anything really to renegotiate
about it. But certainly we wanted to
stress the alliance and what it means,
what it implies, and what the various

i'ltries get out of it. And I think that
such a thorough examination will lead
people to the same conclusion that was
reached last year; namely, that il

tremendous benefit to all of the coun-
tries involved. After all, we are talking
about the defenses of a country that is
very precious. It is a very precious thing
to have freedom, to have the freedom to
change government by a vote, to live
under the rule of law. There are a lot of
people in this world who don't have the
rule of law. There are a lot of people in
this world who don't have those
privileges, and all you have to do is talk
to some people who don't have them or
talk to some people who have recently
acquired them and you find out their
significance and importance. What we
are talking about here is a treaty that
has helped to preserve those values and
extend them in this part of the world
and which has played its part— just as
the NATO alliance has played its part in
Europe— in keeping the peace for a long
period of time. This is an alliance for
peace, and it has worked.

Q. With the need for access by
allied aircraft to airfields and ports of
ANZUS members, are you looking for
restricted access to Australian air-
fields by B-52 bombers?

Secretary Shultz. No, we are talk-
ing about the fact that, for example,
there are resupply flights — cargo flights,
military cargo flights — that come into
Christchurch, say to resupply Antarctic
stations. The same thing is true with
respect to some facilities in Australia.
There are B-52 training flights and
through flights of various kinds. It's that
sort of thing that is being referred to.

Foreign Minister Hayden. Can I
add one note, so there's no misunder-
standing. There are special ar-
rangements in respect to B-52s, but
Secretary of State Shultz should also
have mentioned that we have regular
joint military operations of exercise with
New Zealand and the United States.
They involve air units as much as
ground forces and naval units. So in that
sense, we've got to have this sort of pro-
vision. Otherwise, if there were any pro-
hibition against aircraft movements,
there would be no exercises. No exer-
cise, no military association. Therefore,
there would not be in any meaningful
sense for us in Australia — and I speak
only for us in Australia — a military
alliance.

Q. In the context of regional
security, was the question of a Pacific
ready-reaction force discussed? And if
so, how wide was the discussion?

Foreign Minister Hayden. I don't
know anything about a Pacific ready-
reaction force, I'm afraid.

Q. Could you clarify that point? I I
it that you believe the agreement is
not negotiable?

Secretary Shultz. It is an agree-
ment. And it stands on its feet. And I
believe that careful examination, in a
realistic and thoughtful way, of what it
has accomplished — how it works, what
it means to the various countries in-
volved— will lead to the conclusion thai
it is a very good thing. But, of course
that is up to each country to determine
and review for itself. It has stood the
test of 33 years. It has stood the test o
a lot of change around the world. It ha
stood the test of changes of governmei
in all three of the countries involved, s<
it must have something good about it
And I think when you look at it careful k
ly, the good will shines through very,
very strongly.

Q. But as far as you're concerned
a nuclear-free New Zealand means ni
treaty as far as we're concerned?

Secretary Shultz. I have tried to
state my position on that, and I won't
try to restate it.

Q. Aren't you waving a big stick
over a fairly small matter?

Secretary Shultz. No, I don't third
liberty and freedom and the rule of lav
are small matters. And the defense of
them is the most important thing that
we have to do. These matters are the
essence of our society in the United
States, and I believe— from what I km
of the societies of Australia and New
Zealand— these values are highly prize
And if you say that you won't defend
them, pretty soon you're not going to
have them.

Q. So a handful of visits of nucle
vessels to New Zealand ports is vital
to the freedom of —

Secretary Shultz. If you're going t
have a military alliance, then the
military forces of the countries involve-
have to interact. They have to talk to
each other. They have to know the
equipment that's involved. They have ti
plan. They have to exercise. They have
to train themselves. All these things ai
just commonplace. There's nothing ag-
gressive about the forces of the ANZU
alliance. It is a defensive alliance. In
order to deter aggression, it has to be
credible deterrent. And a credible dete
rent is one that people know is kept up
to scratch and is worked on constantly
And that's the essence of what our
armed forces do all over the world.

Q. Mr. Shultz has told us that
things change once you get to govern
ment. That was your experience, par-
ticularly with the ANZUS agreement

Department ot State Bullet

ARMS CONTROL

hat do you think Mr. Lange might
told that might change his mind?
Foreign Minister Hayden. Nothing
anged since we got into government,
respect to ANZUS, we declared
fore we got into government that we
)uld seek a review. When we got into
vernment, we pursued that. It was, as
r. Shultz pointed out, a quite thorough
sessment of the ANZUS agreement
at was conducted in Washington last
ar. So there was a change in that
spect. What happened was that with
e experience that we had in govern-
:nt, there was a consolidation of our
mmitment to ANZUS. There has
ver been any disagreement between
y of the major political parties in
istralia in regard to ANZUS.
lything that might be discussed with
r. Lange is something for discussion
th Mr. Lange, not on the public plat-
-m.

Q. Recognizing the importance of
e alliance, is it imperative that New
aland change its stand?

Foreign Minister Hayden. That's
J- New Zealand to decide, and Mr.
! ultz said much earlier that time was
I eded to sort this problem out. I don't
] ve his exact words. As far as I'm con-
i rned — I quote the situation as
. istralia sees it, I am not talking for
'. >w Zealand — there are other people to
i that.

Q. If New Zealand was to stand
: -m, would that put increasing
] essure —

Foreign Minister Hayden. You're in
• e area of hypotheses now and as Mr.
I iultz said, he's not in the iffy business,
; d I'm not in the hypothesis business.

Q. It's no hypothesis. It's Labor —
Foreign Minister Hayden. Excuse
Is a minute, gentlemen. Let me tell you
: mething. You're out of luck. I've been
i this game a long time and I'm not go-
| g to be drawn in.

Q. Labor has said here that they
on't negotiate their position —

Foreign Minister Cooper. Excuse
le a minute, ladies and gentlemen. We
live been in an ANZUS conference a
liy and a half. We had a very wide
benda — East-West relationships, com-
I -ehensive nuclear test bans, disarma-
ment, arms control, the problems of con-
lict in various parts of the globe, the in-
I Tnational economic situation and I
'link we are starting to regurgitate ex-
_"tly the same questions.

I do believe that if the relationships
((■nong the three countries are as we
|ave discussed them — last year in
i/ashington, this year, and on many

other previous occasions — there must be
other subjects rather than picking away
at this particular one. Because I believe
that the U.S. Secretary of State has
answered the same question four or five
times, and I think that Mr. Hayden is in
exactly the same situation. Is there
anyone here that is slightly interested in
arms control and disarmament, for in-
stance?

Q. Are there any plans for nuclear-
powered ships to visit New Zealand in
the next 6 months?

Secretary Shultz. We don't confirm
or deny anything about any particular
ship. And so I'll just have to stick with
that policy.

Q. Nuclear-powered ship?

Secretary Shultz. No, not that I
know of. Admiral Crowe is here. Is that
the right answer?

Admiral Crowe. There are no ships
in the next few months.

Q. On this issue of Australian sup-
port for the Indian Ocean zone of
peace, does that mean that this will
involve our projection or nonprojec-
tion of power in keeping warships out
of the area?

Foreign Minister Hayden. If you've
got a zone of peace, it is highly likely
that there will be no combatant ships in
the area, certainly no outside ones. But
we're a long way from that. We're a
long way from formulating the prin-
ciples that people might address
themselves to all that we're working
toward at the moment, which is as much
as we can hope to achieve as the first
step, is a consensus for the littoral na-
tions and the superpowers that some
sort of conference should go ahead. And
when we do that, then we can sit down
and start sorting out what the agenda is
and what the principles will be. So it's
going to be a long task. Now you might
be impatient with that. So am I. But I

Status of Conference on
Disarmament in Europe

PRESIDENT'S STATEMENT,
JULY 17, 19841

Today, I met with Ambassardor James
E. Goodby, the chief of the U.S. delega-
tion to the Conference on Confidence-
and Security-Building Measures and
Disarmament in Europe. This con-
ference, commonly known as the CDE
or the Stockholm conference, involves
the United States, Canada, and 33 Euro-
pean nations and is part of the East-
West dialogue which originated in the
Helsinki accords of 1975.

Ambassador Goodby briefed me on
the second round of the conference,
which has just concluded, and on the
prospects for progress when the talks
resume in September. He noted the con-
tinuing efforts of the United States and
our NATO allies to achieve an outcome
which will genuinely increase mutual
confidence and reduce the risk of war in
Europe. Earlier, in the first round of the
conference, the West put forward a
package of concrete proposals designed
to achieve these goals.

In an effort to achieve progress in
Stockholm, I announced in June in my
address to the Irish Parliament that the
United States is prepared to consider

the Soviet proposal for a declaration on
the non-use of force if the Soviet Union
is willing to discuss concrete measures
to put that principle into action. We are
disappointed, however, that the Soviet
Union has so far failed to join the great
majority of the 35 participating nations
at Stockholm which have demonstrated
a desire to begin such concrete negotia-
tions.

I assured Ambassador Goodby that
he has my continuing strong support in
our efforts to get on with the practical
negotiations for which this conference
was intended. We will continue to do our
best to achieve progress at Stockholm,
just as we and our allies are working
hard together in other multilateral areas
of arms control — such as the East-West
conventional force talks in Vienna and
the 40-Nation Conference on Disarma-
ment in Geneva.

We are equally ready to seek resolu-
tions to bilateral U.S. -Soviet arms con-
trol issues on a flexible basis, but there
must, of course, be a willingness on both
sides to engage in practical discussions.
We, for our part, will not be found
wanting.

xText from White House press release.

leptember 1984

ARMS CONTROL

can't help it. That's the experience that
running into.

Q. Was there any discussion at the
council meeting on your proposal put
to ASEAN last week for a conference
on Kampuchea to be held in Australia?

Foreign Minister Hayden. No, it
went on the back burner. In fact, 1 think
it may have gone over the back of the
stove.

Q. Are you happy that this ANZUS
council meeting went ahead, consider-
ing that the administration that you've
been talking with will be out of office
next week?

Secretary Shultz. I think we should
carry on with our plans. We had a very
good exchange of views among us, and I
think it's been quite a worthwhile
meeting. It's also, I think, a good oppor-
tunity to meet the incoming government,
and I was struck by the extraordinary
courtesy which Mr. Lange extended to
me and to Mr. Hayden in coming to the
airport and greeting us. It was a very
generous gesture on his part, and I'm
sure both of us look forward to having a
chance to talk with him before we leave.
So I think in some ways, it's worked out
quite fortuitously.

Q. I'd like to ask a question of
Foreign Minister Hayden and
Secretary Shultz. Should the ANZUS
treaty become ineffective, would you
seek to create some bilateral security
arrangements between Australia and
the United States?

Foreign Minister Hayden. We see
it as effective right at this point, and as
I said earlier, I'm not in the area of
hypothesis. If anything happens later on,
1 guess we would look at it. At this
point, it hasn't happened.

Secretary Shultz. Ditto.

Q. Could you tell me what hap-
pened at the conference on the issue
of French nuclear testing?

Foreign Minister Cooper. We've

really left thai to a greal degree to the
forum in Tuvalu. We're aware of the
igard to possible moves
1 fie nuclear (rev
zone, but I think that it migh! be a good
idea i1 that question to .Mr.

Hayden. in regard to the init;

iken in this area.
Foreign Minister Hayden. We have
ted regularly, in fac
casion then aclear tes

h and publi linue

I
gram is in place, and they will
I would hope that one day they will be
■ ry out laboratory te

not sure how you do that — it will be
very interesting — but until then, they
will continue to test in the South Pacific.
1 guess that's a long time.

At our recent national conference,
one of the decisions taken was the deci-
sion that there would be no further ex-
ports of uranium to France while it con-
tinues to carry out these nuclear tests.
That decision was effective forthwith. It
involves the cancellation of contracted
uranium sales in excess of $130 million.
In turn, I expect that will involve a fair-
ly substantial compensation payment
from Australia. And although this is not
enforceable as law, I think there's a
general feeling there will be an obliga-
tion to meet it.

Q. Last year our Prime
Minister — our out-going Prime
Minister — said that he'd been given a
date as to when the French testing
would end. Do you know the date?

Foreign Minister Hayden. No. I
spoke to the French afterwards, and I
got the impression that they didn't. They
said quite explicitly they didn't have any
date in mind.

Q. You called for a report on the
prospect of mainland France nuclear
testing being carried out there. Have
you had that report back yet?

Foreign Minister Hayden. I read
that in the National Times and the guy
who wrote it is over there [pointing]. He
keeps telling me I told him, and I keep
saying I didn't so I've decided I'd better
fix it up by putting in a request for such
a report, and I did that 2 weeks ago.

Q. Returning to the French
nuclear testing question. There are
some documents that fell out of the
back of the Ministry of Foreign Af-
fairs here in Wellington some weeks
ago that suggest New Zealand doesn'
take a very strong line in opposition 1
that testing. Indeed, it featured, in
part of the recent trade, talks as a
trade-off if those documents are to bi
believed. Do you find that a matter ft
regret?

Foreign Minister Hayden. These
are New Zealand foreign affairs
documents? I don't know anything abot
them.

Foreign Minister Cooper. I find it
matter of regret that journalists would
believe anything that fell out of The N»
Zealand Times. They are not authentic.
They were taken by one official, in my
belief. They were given to the media.
They had a slant on them, and to sug-
gest that I, as the Minister of Foreign
Affairs and Overseas Trade, had an
under-the-counter deal with the French
Foreign Minister or the French Trade
Minister or Agricultural Minister, is
abolutely nonsensical, and you should b
aware of that.

'Held at the U.S. Embassy (press relea;
166 of July 18, 1984).

2Press release 162 of July 12.

3Press release 164.

4Press release 171 of July 20.

5Made at the luncheon for the ANZUS
council (press release 196 of July 19).

6Press release 174 of July 23. ■

Proposed Outer Space Negotiations

WHITE HOUSE STATEMENT,
JUNE 29, 1984'

The U.S. Government has taken note of
the statement by the Soviet Government
proposing a meeting of delegations in
September to begin negotiations on "pre-
venting the militarization of outer
space." The militarization of space began
when the first ballistic missiles were
tested and when such missiles and other
weapons systems using outer space
began to be deployed. The U.S. Govern-
ment, therefore, draws attention to the
pressing need for the resumption of
negotiations aimed at a radical reduction
of nuclear weapons, on a balanced and
verifiable basis.

Therefore, the U.S. Government hi "
informed the Government of the Soviet
Union that it is prepared to meet with
the Soviet Union in September, at any
location agreeable to the Soviet Union
and the government of the country
where the meeting is held, for the
following purposes: (1) to discuss and
define mutually agreeable arrangement
under which negotiations on the re-
duction of strategic and intermediate
range nuclear weapons can be resumec
and (2) to discuss and seek agreement
on feasible negotiating approaches whi
could lead to verifiable and effective
limitations on antisatellite weapons. W-
will also be prepared to discuss any
other arms control concerns or other
matters of interest to both sides.

EAST ASIA

We will continue contacts with the
viet Union through diplomatic chan-
ls on arrangements for these
ptember talks.

HITE HOUSE STATEMENT,

JLY 27, 19842

us morning's TASS statement
srepresents our position, which is that
i have accepted the Soviet proposal
r discussions in Vienna in September
thout preconditions. Our preparations
e continuing vigorously, and we expect
be in Vienna. We do not believe that
ch discussions are impossible, and we
e continuing to deal with this subject
private diplomatic channels.

The U.S. finds it very disturbing
at the Soviets portray the United
ates as responsible for the breakdown
the nuclear negotiations in Geneva
en the world knows the Soviets
Iked out of those discussions. Already
isting nuclear systems deserve our
st urgent attention. If the Soviets do
t choose to listen to our views on this
iject, they need not, but, for us, and
mankind, this subject is too impor-
t to ignore. This U.S. approach does
t represent a precondition. We will
e whatever the Soviets say on anti-
llite weapons seriously and respond
structively. We simply point out that
wish to restore exchanges on the
bject of offensive nuclear arms. The
rid has a right to expect the U.S.S.R.
id the United States to maintain such
scussions.

HITE HOUSE STATEMENT,
UG. 1, 19843

: le United States had made clear to the
i wiet Government in a series of high-
] vel messages that it accepts the Soviet
i nion's June 29 proposal and is
•epared for serious talks in Vienna on
< iter space, including antisatellite
i eapons. We have expressed our view
lat the problem of weapons in space
mnot be considered in isolation from
lie overall strategic relationship but
1 lat we have no preconditions for the
! ienna agenda.

Despite this clearly stated, positive
I and on our part, the Soviet Union has
j leged that the United States has re-
nted the Soviet proposal. The latest
, [oscow press briefing repeated these
larges, despite the clear statement of
|ie U.S. position in a series of high-level
Messages conveyed to the Soviet
Government in diplomatic channels.

September 1984

In our communications with the
Soviets, we have stated our view that
their proposal for a conference on the
"militarization of outer space" is an "ex-
cellent idea" and that we are prepared
to have a U.S. delegation in Vienna on
September 18 to engage in such negotia-
tions.

We recently presented a proposal
for a possible joint Soviet-American an-
nouncement on the content and objective
of the Vienna talks. This proposal states
explicitly that the aim of the talks
should be to work out and conclude
agreements concerning the militarization
of outer space, including antisatellite
systems and other aspects of this issue.

In response to the Soviet proposal of
a mutual moratorium on antisatellite
tests from the outset of the talks, the
United States expressed a readiness to
have our negotiators consider what
mutual restraints would be appropriate
during the course of negotiations. The
latest Soviet statements have converted
this proposal into a precondition, a

transformation which suggests a dis-
ingenuous Soviet approach. We continue
to believe that possible mutual restraints
are an appropriate subject for the
negotiations. The joint statement,
however, should not prejudge the out-
come of these negotiations.

The Soviet Union has repeatedly
misrepresented the U.S. position regard-
ing the opening of arms control talks
between our two countries in Vienna.
From this latest Soviet statement, it ap-
pears that the Soviets were not serious
about their proposal. We regret this. As
noted above, we have consistently ac-
cepted their proposal to meet in Vienna.
We prefer that this matter be dealt with
in diplomatic channels.

'Made by Robert C. McFarlane, Assistant
to the President for National Security Affairs
(text from Weekly Compilation of Presiden-
tial Documents of July 2, 1984).

zText from White House press release.

3Made by Ambassador McFarlane (text
from White House press release). ■

The U.S. -China Trade
Relationship

by Paul D. Wolfowitz

Address before the National Council
for United States-China Trade on
May 31, 1984. Mr. Wolfowitz is Assist-
ant Secretary for East Asian and Pacific
Affairs.

I don't need to tell you who are gathered
here today that doing business in China
is seldom doing "business as usual." You
who have been engaged in doing
business in China have, indeed, been do-
ing business as extraordinary: under
special and ever-changing circumstances
and in a still uncertain investment
climate. But most extraordinary is the
contribution that your endeavors make
to U.S. foreign policy; and it is that con-
tribution which I would like to acknowl-
edge at the outset here today.

Building a Comprehensive
Relationship

When President Nixon traveled to China
in 1972, our economic and cultural rela-
tions were almost nonexistent. The focus
of the relationship was almost entirely
our shared strategic concerns over
Soviet power and expansion. By con-
trast, during his recent trip, President
Reagan devoted perhaps 50% of his

discussions with the Chinese Premier to
economic and trade concerns. Our coun-
tries have developed a vital and growing
economic relationship. This organization
and some of the people in this room had
a good deal to do with that growth.

Some would go so far as to say that
the remarkable growth in our economic
ties has brought us to a point where
economic interests have replaced
strategic interests as the focus of our
relationship. That, however, would be
wrong. Our economic relations are, in-
deed, extremely important. But our
strategic interests also remain as
important today as they were when
President Nixon opened the way to
China.

We do not expect an alliance with
China, nor are we playing cards. Indeed,
we don't think that a successful long-
term relationship— and that is what we
seek— can be built on a basis that makes
our relations with one country depend-
ent on tactical shifts in our relations
with another.

Rather, our strategic relationship
rests on common concerns about the
growth of Soviet military power and the
tendency to use that power— whether by

EAST ASIA

the Soviets themselves, as in Afghani-
stan, or by their allies and proxies, as in
Kampuchea. We have some important
differences with China on international
questions, differences that the Chinese
are at pains to highlight, lest we— or
others— forget that China has an inde-
pendent foreign policy. But our common
concerns create important common in-
terests in resisting Soviet pressures and
in seeking changes in Soviet policies that
would genuinely reduce tensions in the
region and in the world. This remains a
central element in our relations.

We also have increasingly important
cultural ties with China. The Chinese
have sent some 12,000 of their brightest
students to study in this country, and
we have extensive exchanges of our own
in China. These exchanges may be out-
most important legacy to the future ties
between our countries. These students
will one day form a core of understand-
ing that will speed our efforts, just as
our relations in the early 1970s were
spurred by a long history of ties before
1949.

In short, we have today neither a
predominantly economic nor a predomi-
nantly strategic relationship but rather a
comprehensive one, in which each ele-
ment reinforces the others. Indeed, the
economic progress that your group has
helped to build, important in itself, is
also an important element in the
st rategic equation.

Over the last 12 years, our bilateral
relationship with China has grown richer
and deeper, the range of our cooperative
endeavors broader, and the opportuni-
ties for future cooperation more
numerous than before. Both sides have
put aside the myths, unrealistic expecta-
tions, and, frankly, the impossible
demands of the past. As Secretary
Shultz has said, we seek a relationship
that is no longer subject to the alternat-
ing cycles of euphoria and depression
that have characterized the past, but one
which rests on a stronger, more stable

nidation. Of equal significance, we
seek such a relationship without sacri-
ficing the principles and friendships our
nations value.

The distance we have traveled and
the benefits we have gained from im-
proving relations with China are perhaps
most clearly seen not in what is but in
what was. We need only think back to
the open hostilities of the L950s or to
the antagonism of the 1960s to realize
the costs that a return to confrontation
in our relations would impose.

The Trade Dimension

Today, I would like to discuss the dimen-
sion of our relationship with China that
is of particular interest to this group-
trade. In trade, as elsewhere, we have
too often been the victims of our own
euphoria. Often, in the past, people have
been mesmerized by the thought of a
market with four times as many con-
sumers as our own. We have an obliga-
tion equally to avoid wishful thinking
and jaundiced pessimism and to judge
prospects realistically.

The unembellished record to date is
itself impressive. Since normalization of
relations, our two-way trade has grown
fourfold, from $1.1 billion in 1978 to
$4.4 billion last year. Our trade has, to
be sure, not grown steadily. U.S. ex-
ports, particularly of agricultural prod-
ucts, have been volatile.

While our total trade with China
does not involve large sums in terms of
our overall trade worldwide, trade with
China can be, and is, very important to
particular enterprises and sectors of our
economy— some of which are well repre-
sented in this room.

Today, I would like to discuss three
principles that seem to me particularly
important as guides for the govern-
ment's approach to this important area
of our relationship.

First, that an economically moder-
nizing China is in both our countries' in-
terests.

Second, that it should be the role of
the government to facilitate and further
trade, though not at the expense of our
security.

Third, that in the trade area, as in
other areas, it is important that both
sides live up to the agreements that they
make.

I need hardly elaborate for those in
this room the economic benefits a
modernizing China could bring to U.S.
business. But, as I suggested earlier,
economic benefits are only part of what
we might hope for from a modernizing
China. We believe that an increasingly
prosperous China will be more stable,
more secure, and more able to resist
outside pressure and intimidation. That
serves American interests as well, both
globally and regionally. A modernizing
China that is more integrated with the
world economy will develop important
trading ties to other Asian and Pacific
nations. Such ties help to reinforce the
constructive trends in China's interna-
tional role, trends from which the
United States and our friends and allies
in Asia benefit.

;■

The Chinese see our willingness to
cooperate in their modernization efforts
as an important element in their pros-
pects for success and in our relations.
We have declared ourselves— and showrp
ourselves— willing to help.

The President made the most tangi
ble expression of his desire to see China
modernize last spring, when he directed
that China should be treated as a
"friendly, nonallied" country with
respect to exports of high technology.
Guidelines published last November
raised the levels of technology that
would generally be made available to
China in seven important product
categories. The level of permitted
exports of computers, scientific in-
struments, and microelectronic manufac
turing equipment, to name three impor-
tant examples, were raised significantly
Roughly 75% of all applications we are
now receiving for high-technology ex-
ports to China are processed under the
new, expeditious guidelines. And we are
working now on liberalized guidelines
for 10 additional product categories
which should cover a further 10%-15%
of license applications.

As expected, the new policy has
helped to encourage a healthy increase
in U.S. high-technology exports to
China. In 1982, approximately 2,000 ex-
port licenses were approved, with a tote
value of just over $450 million. In 1983,
there were 3,300 approvals, valued at
approximately $1.1 billion. In the first
quarter of 1984 alone, 1,170 licenses
were approved, and the value of license
high-technology exports to China for all
of 1984 could surpass $1.5 billion.

The sheer volume of license referra
has placed a considerable strain on the
COCOM [Coordinating Committee for
Multilateral Security Export Controls]
mechanism. Since the new guidelines
were published last November, U.S. re-
ferrals to COCOM have more than
doubled. Despite this, however, we and
our COCOM partners have succeeded ir
increasing the rate of COCOM aprovals.
so that the backlog of U.S.-China sub-
missions has remained steady at about
300. We believe that processing
times— now generally 60-90 days— can
be reduced.

This council has played an importan
supporting role in the liberalization of
export controls for China, and I
welcome your continued input into this
process. Chinese leaders have made it
plain that they regard our adoption of a
more liberal policy as a turning point in
the relationship, with considerably

Department of State Bulletir

EAST ASIA

|oader implications than its purely eco-
imic effects.

A second principle concerns the
oper role of government in trade. It's
•gely up to individual businesses and
oups like this one to make trade a
ality— a function you are performing
th remarkable results. But govern-
ent certainly has a role to play in
moving unnecessary obstacles and,
iere possible, in promoting trade. We
e doing that, and we will continue to
i so with due awareness that in certain
eas security considerations are an
iportant factor.

The tax treaty, which we signed in
djing last month, is one important ef-
rt to help provide a more predictable
vironment for businessmen and in-
stors. During Premier Zhao's visit in
nuary, he and the President signed
e industrial and technological coopera-
>n accord, and shortly after the Presi-
nt's visit we followed up with the con-
asion of two work programs under the
cord— in the fields of metallurgy and
telecommunications and electronics,
lese and other work programs will
■re our firms an opportunity to partici-
te at an early stage in the planning
ocess of Chinese ministries. And, as
Dst of you know, we will be mounting
oresidential trade mission in a few
mths to give a boost to trade oppor-
mities, particularly for our firms en-
.ged in aerospace industries.

We will continue to work hard to
hieve an investment agreement.

fnericans have invested about $85
llion in joint equity ventures and
veral times that much in other forms

| investment. U.S. oil companies will be
vesting hundreds of millions more in
fshore exploration and major in-
stments in coal are also likely. China

> elcomes foreign investment, not only
a source of capital but also as a very
ficient vehicle for technology transfer.
xr fifth round of negotiations will take
lace in September. Meanwhile, our
verseas Private Investment Corpora-
m plans to organize an investment
ission to China later this year.

We should also note that China has
.ken steps of its own to improve the
mditions for investment. Some of
»ese— such as its patent protection
gislation, organization of economic
>nes, joint venture laws, and tax provi-
ons— are remarkable, considering the
lormous differences in our juridical
nilosophies and legal systems. Nonethe-
>ss, more needs to be done if China is
> continue to attract American in-
estors.

In these and other ways, we seek to
increase trade, but our efforts must not
and will not come at the expense of our
security. That is why, even though our
technology sales are liberalized, restric-
tions remain, not just for China but for
other friendly countries as well. That is
why we will continue to work coopera-
tively with our COCOM partners, so that
we do not weaken the unique institution
which is vital for controlling exports to
the Soviet Union.

Perhaps nowhere have we had to go
to such pains to take security concerns
into account as we did in the long
negotiations to reach an agreement on
peaceful nuclear cooperation. This agree-
ment, which was initialed last month in
Beijing, took over 3 years to negotiate.
It will soon be submitted to the Presi-
dent. When approved by him and signed
by both countries, it will then be for-
warded to Congress, where it must lie
for 60 days of "continuous session"
before it can enter into force. We an-
ticipate full examination and discussion
of the text of the agreement on the Hill.

The implementation of the agree-
ment will further advance our coopera-
tion with China's modernization efforts,
and at the same time it will permit U.S.
companies to compete for a share of
China's ambitious nuclear power pro-
gram.

But the arduous negotiating process
that lies behind this agreement and the
mandatory approval process ahead are
necessary because the possibility of
trade, while enticing, cannot come ahead
of our interest in halting nuclear pro-
liferation. The proposed agreement ad-
vances that interest in important re-
spects. During the course of our negotia-
tions, China took several significant
steps to clarify its nonproliferation and
nuclear export policies. It joined the In-
ternational Atomic Energy Agency
(IAEA) in January and has stated that,
thereafter, it will require IAEA safe-
guards in its nuclear exports. Premier
Zhao has stated authoritatively that
China will not assist other countries to
develop nuclear weapons. In addition to
its other features, the agreement itself
will provide a framework for continua-
tion of discussions with China on non-
proliferation matters. We believe the
agreement is a real advance and
deserves and will receive full bipartisan
support.

A third principle of our economic
relationship has to do with the import-
ance of abiding by agreements. What
needs to be said can be said briefly, but
it is nonetheless important. This is not,
generally speaking, a problem in our
dealings with China. But it has, frankly,

been a disturbing aspect of our grain
trade. Although China was our best
customer for wheat in the period
1980-82, China reduced its grain ship-
ments to 3.8 million tons in 1983, 2.2
million tons short of its obligation under
our long-term grain agreement. The
Chinese have implied at various times
that reduced purchases were a response
to U.S. import restrictions on Chinese
textile imports or other factors having
nothing to do with the agreement. We
find unacceptable this unilateral attempt
to condition performance on matters un-
related to the agreement, and we have
made our position clear. We are pleased
that the Chinese have assured us that
they will make up the 1983 shortfall and
meet their 1984 obligation.

If we continue to follow these three
guidelines— cooperating on China's
modernization; facilitating trade while
protecting our security; and abiding by
agreements— we can build a sound foun-
dation for growing economic ties be-
tween our two countries. Such growth is
both good business and good foreign
policy.

Conclusion

In the short term, there is reason to
believe that trade will recover this year
as our high-technology exports continue
their momentum and as the Chinese
meet their grain purchase obligations.
Premier Zhao recently told us that we
can expect our traditional bilateral
surplus, which evaporated last year, to
return.

In the longer term, the most import-
ant factor in the growth of U.S. -China
trade remains the rate of China's own
economic progress. As China prospers,
we can expect our bilateral trade to
grow, as it has with the many dynamic
economies of Asia.

While China grows, there is a
natural complementarity in some areas
of our economies which holds promise
for the future. China will continue to
want imports of some agricultural prod-
ucts, notably grains. The United States
has grain surpluses. China has its own
industrial base and badly wants to im-
prove the efficiency of its industry. The
United States has technology and man-
agement to offer. China is determined to
develop its energy resources and to use
them efficiently. The United States has
capital and the technologies of energy
extraction and utilization.

What are the prospects for China's
growth? Surely, more growth is on the
way, though its pace is by no means

EAST ASIA

clear. China's most noteworthy progress
has come as a result of the introduction
of the "responsibility system" in agri-
culture. But progress is also being made,
more slowly, in the industrial sector.
The Chinese themselves acknowledge
that they still have enormous problems,
both structural and systemic. But they
have turned in an impressive perform-
ance so far— 6.5% average annual
growth since 1979. And they seem de-
termined to continue to deal with their
problems pragmatically.

ina's economic modernization was
one of the primary subjects of the Presi-
dent's speeches during his recent trip to
China. Understandably, the American
press paid the most attention to portions
of the speeches that noted the differ-
ences between us or that the Chinese
media regrettably did not cover. The
President's most important speech, the

one at the Great Hall of the People, was
about America's involvement in China's
modernization. That speech was warmly
received. Indeed, it was interrupted re-
peatedly with loud applause. Extensive
portions were televised for audiences
throughout China.

In one of the most important
passages of this speech, the President
said:

Today, I bring you a message from my
countrymen. As China moves forward in this
new path [of economic modernization],
America welcomes the opportunity to walk by
your side.

That is perhaps the overriding
message of the President's trip. It is the
message that won him so warm a recep-
tion and that promises so much in future
cooperation between our peoples. The
President was the messenger— it is you
who will deliver the goods. ■

Taking Stock of
U.S.-Japan Relations

by Paul I). Wolfowitz

Statement before the Subcommittees
on Asian and Pacific Affairs and Inter-
iialimial Kcinnimic Policy and Trail, of
tin House Foreign Affairs Committer
on June 12, 1984. Mr. Wolfowitz is
Assistant Secretary for East Asian and
Pacific Affairs.1

It is a great pleasure for me to have the
opportunity to appear before you today
to discuss one of our nation's most im-
portant bilateral relationships— that
with Japan. The hearings on U.S. -Japan
relations that you held in 1982 made a
major contribution to illuminating the
importance of this relationship and the
problems and opportunities within it. I
would like to commend your subcommit-
tees for holding these new hearings to

bring not longress bul also the

American people up to date on wl

rid in our relationship with Japan
and v. | are going.

I havi carefully the ques-

tions thai you have posed for these hear-
ings and believe thai n be
grouped into three genera ies. It

i
would like to present nr.

First, ho dministrai

view the Mature of our relatioi

Jap;

Second, what have been the major
developments in our relationship over
the past 2 years?

Third, what are the challenges and
opportunities of the future and how do
we intend to deal with them?

THE NATURE OF OUR
RELATIONSHIP WITH JAPAN

The President's historic trip to Japan
last November successfully conveyed the
preeminent importance that we attach
to our relationship with Japan. Given its
economic power and its growing interna-
tional role, Japan clearly has become one
of the most important countries in the
world to us. While bilateral trade prob-
lems garner significant attention— legiti-
mately so— and often generate inor-
dinate controversy, our overall policy
toward Japan transcends these issues
and is based on three developments.

First, we have worked to achieve a
close bilateral relationship, with Japan
as an equal partner. The past decade has
brought a significant expansion of
Japan's economic and technological
prowess; an increase in its defense
awareness and capability; and a greater
interest and involvement in international
political and economic affairs. Of course,
there still are differences in our relative
political, economic, and military posi-

tions in the world. But we approach and
conduct our relationship as equals.

Second, because of our combined
economic and technological impact on
the world, our relationship has grown
beyond the bounds of the bilateral and
become global in scope. This was the
theme of Secretary Shultz's landmark
Shimoda speech last September, when
he referred to our new relationship with.
Japan as an "international partnership."
While our combined impact on the work
is measured primarily in economic and
technological terms, in the future it will
have a greater political dimension as
Japan assumes a greater international
role and associates itself more actively
and closely with the political and securi-
ty goals of the West.

Third, Japan is becoming increasing
ly assertive in global matters and is
forging a new international role for
itself. During most of the postwar
period, Japan pursued an international
role that was quite similar to our own
throughout most of American history-
pursuing economic interests and eschew
ing political involvement. But, par-
ticularly since the events in Iran and th
Soviet invasion of Afghanistan in 1979,
the Japanese have come to realize that
their own well-being is affected directly
by political and security developments
elsewhere in the world. The implication
are clear— the days of "economic giant,
political pygmy" are over. The United
States wishes to encourage this trend
toward a greater international political
and economic role by Japan, within the
framework of a continued close biiaters
relationship.

When many people look at
U.S.-Japan relations, the focus is on tht
problems in our relationship and not on |m
its successes. But I believe that if we
step back and take a look at our overall
relationship, we would determine that i' I
is the best that it has ever been and tha
the problems that we have are the ex-
ceptions and not the rule.

First of all, it is the general consen-
sus of Administration officials and long-
time observers of U.S.-Japan relations
that our defense relationship with Japai
has never been better. We forget too
easily the scenes of years past, when ou|ii:
mutual security relationship and the
presence of U.S. bases caused tremen-
dous political upheavals in Japan. Todaj si
both the Treaty of Mutual Cooperation
and Security and the presence of U.S.
military bases are accepted by the large p

Department of State Bulleti. ti

EAST ASIA

ijority of the Japanese people. Beyond
,t, more Japanese are coming to ac-
t and appreciate that our bases in
an contribute not only to the defense
Japan but also to our mutual interest
maintaining peace and stability
oughout the Asian region and
- (bally.

Second, we have with Japan one of
1 broadest and most diverse scientific
ationships that we have with any
antry in the world— both in the
ivate sector and between our govern-
mts. Our science and technology rela-
nship with Japan is not a one-way
•eet either. As one example, U.S. com-
nies that have signed cross-licensing
reements with Japanese companies
|w receive more patents back from
ipan than they send there.
I Our educational and cultural rela-
tnship with Japan is another aspect of
cr relationship that we hear little
■ Dut — again, because everything is go-
1* so smoothly. There is a renewed in-
vest in Japan and Japanese studies in
t J United States. We have one of our
r >st active youth exchange programs
\ Lh Japan. We have over 1 million
v oanese tourists a year visiting our
c antry. Now we even have a 24-hour-a-
c y television satellite relay between our
t o countries. Japanese viewers wake
t every morning to a live 5-minute
l ws report from New York describing
« ents in America.

The one area in our relationship
fiere we continue to have well-publi-
( ed problems is bilateral trade. Yet
< en here I would argue that, even
1 )ugh difficulties in access and market
I netration remain, the Japanese
] irket is more open now to most
i nerican products than it was even 2
5 ars ago. Although the common
] rception is of a closed market, Japan
<■ tually is our largest overseas market.
jj ist year, it bought $23-billion worth of
i nerican products, equal to our exports
1 France, West Germany, and Italy
imbined. Japan is our best overseas
jirket for agricultural products, yet
1 ly one-fourth of our exports to Japan
|<e in that category. Japan is a major
larket for U.S. manufactures; in fact, it
liys more manufactures from us than
I est Germany does. Japan is our first
} second largest market for a wide
j nge of manufactured goods, such as
1 emicals, commercial aircraft, photo-
; -aphic supplies, medical and scientific
[uipment, and pharmaceuticals. In ad-
ition, Japan buys $10-billion worth of
American services from us, and we run
surplus with Japan in services trade.

Beyond that, Japan has increasingly
invested in the United States. This
direct and portfolio investment creates
employment, helps finance our govern-
ment's deficit, and makes money avail-
able for our banks to lend to American
companies and consumers. In 1982,
Japan transferred $20 billion in capital
back to the United States, an amount
almost equal to our merchandise trade
deficit.

I do not deny that we still have
trade difficulties with Japan. We do, and
we must deal with them. My point is to
indicate that we have made progress in
resolving these problems within the con-
text of our overall healthy economic
relationship. The Administration will
continue to address trade problems dili-
gently as they arise. The size and com-
plexity of our trade— $63 billion in two-
way merchandise trade in 1983— guaran-
tee that we will continue to have trade
problems in the future, especially as
both countries develop their potential in
the high technology area.

MAJOR DEVELOPMENTS DURING
THE PAST 2 YEARS

The past 2 years have been one of the
most active and productive periods in
U.S. -Japan relations. The President's
meeting with Prime Minister Nakasone
last week in London marked their fourth
meeting in 18 months. Secretary Shultz
and Foreign Minister Abe have met 10
times in that same period. The Presi-
dent, the Vice President, and nearly
every member of the President's Cabinet
have visited Japan. In one very busy
week in early May of this year, we ac-
tually had the Vice President, the
Secretary of State, and the Secretary of
Defense, all making separate visits to
Tokyo.

But as much as our life at the State
Department is centered around prepara-
tions for meetings, we recognize that
frequent meetings do not represent
progress in themselves. There has been
significant movement in all aspects of
our relationship with Japan. Let me look
first at our economic relationship.

U.S. -Japan Trade

Historically, the U.S. Government has
taken a product-by-product approach to
U.S. -Japan trade, dealing with the con-
tentious issues of the moment. In the
1950s, we were concerned about clinical
thermometers, one dollar blouses, and
cotton typewriter ribbons. In the 1960s
and 1970s, the products shifted to tex-

tiles, color TVs, and specialty steel. To-
day, we worry about computer software,
telecommunications equipment and serv-
ices, and fiber optics. Historically, as we
resolved each problem, another industry,
another product, and another problem
would come along.

While continuing to work to achieve
greater market access for specific prod-
ucts and services, the Reagan Ad-
ministration has taken a broader, longer
term view that seeks to deal with the
underlying issues in the Japanese
economy and industrial structure that
limit our access to Japan's market.
There are a number of examples of our
success in this regard.

Standards Laws Reform. In terms
of its direct and long-term impact on a
wide range of U.S. exports, Japan's
reform of its standards and product-
approval laws is one of the most signifi-
cant actions that it has taken. In
response to U.S. concern, Japan passed
major revisions of its standards and
product-approval laws in May 1983,
making it possible for U.S. firms to
apply directly for approval without go-
ing through Japanese agents. We are
now working actively to allow product
testing to be conducted in the United
States by American firms and are seek-
ing the ability for U.S. companies to
help participate in designing Japanese
standards. As the door opens wider, we
hope more American companies will
take advantage of those fundamental
changes and become reliable suppliers to
Japan. At the same time, should prob-
lems arise, we want to be alerted so that
both sides can work to deliver the full
potential of this opening.

Transparency. The gradual move-
ment toward transparency in Japanese
procedures and decisionmaking also will
have a long-term impact. Basically, in a
number of ways Japan is moving toward
a "sunshine law" approach, allowing U.S.
firms to participate in actions that affect
their access to and ability to compete in
the Japanese market on an equal
footing. The Japanese Government has
agreed to transparency in a number of
ways over the past 2 years. For exam-
ple, U.S. firms can now make their
views known in developing Japanese
standards; Nippon Telegraph and
Telephone (NTT) has agreed to pro-
cedures which should allow U.S. firms to
participate in its research and develop-
ment work; and the president of the
American Chamber of Commerce in
Japan has been invited to testify before
a Japanese Diet committee, as have

jptember 1984

EAST ASIA

sentatives of the U.S. Trade

;i i\ c. I lepartment of Com-
merce, and the U.S. Embassy. The

have even expressed a will-
ess to allow us to make our views

n to their industrial deliberation
cils, which will provide them the

perspective on potential changes
before they can be implemented.
Further, the Japanese Government's
April 27 package of trade measures and
its joint report on capital markets/yen-
dollar publicly stated that efforts toward
greater transparency in some areas will
continue.

Capital Market Liberalization and
Internationalization of the Yen. In
terms of its tar-reaching international
impact, this is the most significant ac-
tion that Japan has taken during the

2 years. In the Regan-Takeshita
statement of last November, Japan
agreed to further liberalize its capital
markets and to promote a greater inter-
national role for the yen. The U.S.
Treasury-Japanese Finance Ministry
report on yen/dollar exchange rate
issues, approved by Treasury Secretary
Regan and Minister Takeshita and

cil on May 29, commits Japan to a
number of important measures with far-
reaching foreign exchange and other im-
plications. It is a landmark agreement,
and some financial experts have already
labeled it the most important develop-
ment in Japanese finance in 100 years.
Once the measures are implemented
fully, Japan's capital markets will be
more open than those of any other coun-
try in the world except the United

The yen will then be able to play
.i role in international finance commen-
surate with Japan's status as the second
largest industrialized democracy and

I reflect more closely its true value
as determined by international markets.
Voluntary Restraint Agreement on
Automobiles. Japan's voluntary
restraints on auto exports over the past
4 years have given U.S. companies a

d breathing space to retool and in-
vest, and this is having a long-term im-
pact on the competitiveness of the I '.S.
automobile industry. Today, Detroit is

ing a better built car than it ever

ind to meet the Japanese challenge
it will continue to have to do so. At the
same time, Japan's auto makers are
coming to the United to invest in

iction facilities, providinj

1 ' ng
i has an-
il will double its production;
Toyol ablished a joint

with GM; Nissan plan to

truck production line in Tennessee; and
Mazda and Mitsubishi also are consider-
ing manufacturing in the United States.

High Technology Working Group.
In order to deal with issues on the cut-
ting edge of technology, we have
established a high-technology working
group. It serves as an "early warning
system," seeking to head off trade and
investment problems before they arise.
Far from being solely a forum for
discussion, it already has a number of
concrete successes to point to, such as
Japanese agreement on an import pro-
motion program for semiconductors and
agreement on the mutual elimination of
tariffs on semiconductors. The excellent
working relations established between
U.S. and Japanese participants in this
group have enabled us to make good
progress on the software protection
issue and value-added networks— again,
heading off problems before final action
is taken. A unique feature of this group
is that American and Japanese in-
dustries, such as the semiconductor sec-
tor, participate in the meeting with
government officials. Industry-to-
industry contact thereby is facilitated.

Reinstitution of Regular Economic
Consultations at the Subcabinet Level.
In order to engage in a continuous and
high-level dialogue with the Japanese on
economic issues, we have reinvigorated
the Economic Subcabinet Consultations,
led on the U.S. side by Under Secretary
of State for Economic Affairs Allen
Wallis. We have been holding meetings
every 6 months and have turned out the
highest level attendance ever. The con-
sultations have served as an excellent
forum to let the Japanese know, at a
high level and in a comprehensive man-
ner, our concerns and priorities; to head
off issues before they become real prob-
lems; or to approach outstanding issues
in a nonconfrontational manner better
designed to attain mutually agreeable
resolutions. Under the subcabinet con-
sultation mechanism are the trade com-
mittee and a new investment committee
which was established at the time of the
President's trip in November to promote
and facilitate two-way investment. These
two committees also serve as an ex-
cellent means to make our positions
known to the Japanese in a comprehen-
sive fashion.

Industrial Policy Dialogue. We
have instituted discussions with Japan
on industrial policy, trying to determine
how Japan's industrial policies work and
how they may distort trade or en-
courage trade. We believe that these
discussions already have provided us

with a better understanding of Japan's it
industrial policies and at the same time i
have impressed clearly upon the
Japanese the concern we have with anylu
industrial policies that inhibit trade. I
hope that out of this dialogue will comef"
mutual understanding of the role of
government in promoting industrial
development and of a joint commitment
that industrial policies should not have
conscious trade-distorting effects.

Energy Cooperation. Another step
which will have a long-term impact on :
our economic relationship with Japan is1
the joint statement on energy coopera-
tion issued during the President's trip.
In this, Japan commits itself to consider
seriously trade and investment in U.S.
energy resources— particularly coal and
liquified natural gas. Both governments
committed themselves to facilitate
private sector contact so that coopera-
tion and trade can be expanded. We
recognize that, in the end, market force
will be the determining factor in Japan'
decisions to invest in and buy U.S.
energy resources, but we believe that
the provisions of the joint statement,
when fulfilled, will have a positive im-
pact on our balance of trade over the
longer term.

Exchange Rates. Of all these
measures that deal with Japan's under-
lying economic structure and approach
toward imports, we believe that the
most significant action over the past
2 years— and the action that will have
the greatest long-term impact— is
Japan's movement toward greater
liberalization of its domestic capital
markets and a broader international ro
for the yen. The prevailing exchange
rate also has the effect of making
Japanese goods more price competitive
compared to U.S. products, not only in
the U.S. and Japanese markets but als<
in third-country markets, thereby affec
ting our global trade balance. Experts
do not expect the yen to appreciate im-
mediately against the dollar, given othe
factors. However, we believe that over
the longer term the yen should ap-
preciate because of Japan's perceived
economic strength and political stability
Furthermore, U.S. investment in Japan
will be encouraged because a wider
range of instruments will be available to
finance such investment.

Trade Packages

As I stated earlier, this Administration
also has continued to deal with the ques
tion of access by specific U.S. products
and services to the Japanese market.
During the past 2 years, the Japanese
Government has issued three trade

EAST ASIA

ckages that seek to reduce trade fric-
fil n and increase our ability to compete
the Japanese market on a fair and
uitable footing. By far the most
ificant of these packages from an
« nerican point of view was that an-
unced on April 27 of this year, at the
nclusion of the followup process led by

Vice President. During the Vice
esident's followup, we sought to ad-
ess a number of trade issues of impor-
ice to the United States. Specifically,
ise included beef and citrus quotas,
iffs, high-technology issues (renewal
the NTT agreement, unimpeded ac-
3s to telecommunications value-added
tworks, protection of computer soft-
ire, and satellite procurement), energy
operation, general investment ques-
ns, and capital market liberaliza-
n/internationalization of the yen. The
panese Government package ad-
sssed each of our concerns. Overall,
s package was responsive to our in-
vests, although we were disappointed
it certain items, such as tariff cuts on
■estry products, were not included.

The main elements of the April 27
ckage are:

On the general question of market

:ess— reducing trade barriers and
ning Japan's market further— Japan
imises to take additional steps to
iplify and improve standards and cer-
ication systems, to promote imports,
to accept foreign test data. Prime
nister Nakasone's statement accom-
] nying the package said that the
t panese Government considers it im-
i rtant to conduct "even more vigorous-
P such policy measures as market
< ening, import promotion, encourage-
1-ent of investment to and from Japan,
|jd so forth.

On tariff reductions, it indicates
| at tariffs for a number of products of
i .erest to the United States will be
i olished or reduced in Japan's fiscal
;ar 1985. Cuts on color photographic
| per and reduction to zero in farm
I ichinery (hay balers) are among the
lajor items on the U.S. request list.
1 its on two other major items— wine
Id paper products— have since been

I mlized for implementation over the
Ixt 3 years. As I indicated, there were

I I cuts on forest products, a major

I onomic and political disappointment.
Ivo items from the U.S. 'long
I'.t"— raw furskins of mink and un-

rought magnesium— are included, as

ell as auto emission catalysts.

On tobacco, there is legislation
pending before the Diet that privatizes
the Japan Tobacco and Salt Public
Monopoly Corporation, which will give
U.S. companies the right to import and
distribute tobacco products on their own
account and to set prices with Ministry
of Finance approval. The tobacco item is
a bright spot in the package which could
significantly expand opportunities for
U.S. products.

On agricultural quotas, a satisfac
tory new 4-year beef and citrus agree-
ment was reached April 7, which will
lead to an approximate doubling of U.S.
exports to what already is far and away
our best overall market for these prod-
ucts. An agreement on quotas and
tariffs on other agricultural categories,
such as fruit juices, was reached
April 24.

On high technology issues:

• Computer software— the Govern-
ment of Japan agreed not to seek new
legislation during this session of the
Diet, thereby effectively continuing
copyright protection. The package notes
the need for "international harmony"
and indicates that Japan will not take
any further action on this issue without
coordinating the viewpoints of the other
developed countries. We will continue to
consult on this key issue so that
copyright protection will be continued.

• Telecommunications— the package
refers to legislation which liberalizes the
telecommunications market in Japan.
Restrictions on foreign investment in
Japan's value-added network were
eliminated, and licensing requirements
were changed to notification re-
quirements. The package commits the
Japanese Government to ensure simplici-
ty and transparency in its notification
procedures and fair competition between
the new, privatized NTT and other
telecommunications firms. These
changes are a major step forward for an
open Japanese telecommunications
market. Implementation will be impor-
tant.

• Satellites— Japan revised its
satellite procurement policy, stating that
private firms now will be able to pur-
chase communications satellites from
any source after the passage of the
telecommunications legislation. Further-
more, when NTT is privatized the
government will open the way for it to
purchase satellites in a nondiscrimina-
tory way, while ensuring consistency
with its national space development
policy. Japanese Government agencies
will be able to procure foreign satellites

not necessary for autonomous develop-
ment of space technology. We intend to
continue to press for full open procure-
ment.

On energy cooperation, the package
repeats the Japanese Government's
agreement to send a Japanese coal mis-
sion to the U.S. in May and to facilitate
private sector interest in Alaskan gas
feasibility studies. A Japanese coal mis-
sion came May 14-15 and, while there
were no immediate results, the two
private sectors established an ongoing
committee to continue their dialogue.

On investment, the package accom-
modates our objectives. It establishes an
"expediter" mechanism to relay invest-
ment information and assist foreign
companies wishing to invest in Japan. It
also establishes an investment "om-
budsman" to settle investment
grievances. The Prime Minister's state-
ment included a clear indication that
Japan welcomes direct foreign invest-
ment, and the government is sending a
mission to the United States to promote
investment in Japan. I might point out,
in this connection, that the Japan
Development Bank is now making low
interest loans available to foreign com-
panies investing in Japan, even for sales
offices for U.S. -made products.

On other issues, the package states
that the Japanese Government will work
with the Japan Federation of Bar
Associations to reach an early resolution
of the lawyers' issue. It is noteworthy
that reference to the lawyers' issue was
included, as we believe it commits the
government to show concern and re-
sponsibility for a matter that legally is
under private jurisdiction.

Defense and
Security Cooperation

Another area in which we have made
significant progress over the past 2
years is Japanese defense and security
cooperation. I stated earlier that experts
believe that our security relationship has
never been better than it is today. I
agree. I spoke earlier of the tendency in
U.S. -Japan relations to focus not on
what is going right but on the areas
where we have problems. This is equally
true in defense. A number of years ago,
the focus in the security relationship was
on mutual security cooperation— prob-
lems relating to our mutual security
treaty and our bases in Japan. Today,
one seldom hears about this because

sptember 1984

EAST ASIA

almo hing is going very

ttj of Mutual
and the
' .S. military forces in Japan
id majority of the
Japanese people. The environmental and
cted with the
rican military presence in Japan
largely abated
The issues that do arise in our
irity relationship pale in comparison
In th( I .'.ears past. Japan pro-

tO US rent free and, in
addition, contributes over $1.2 billion an-
lir support. This amounts to
over $23,000 for every American soldier
and sailor in Japan, which is more than
three times the NATO contribution. It is
a tangible manifestation of Japan's
cooperation and its ongoing commitment
to promote security in the Pacific

"IK

The focus in our security dialogue
today, therefore, is not on our bases in
Japan but on Japan's own direct defense
efforts. We need to remember that
Japan's defense policies throughout the
postwar era— concentrating on economic
recoverj and growth, abjuring the exer-
cise of political power, and renouncing
military power— accorded with U.S.
policy desires and represented the
foreign policy most likely to be accepted,
nol only by the Japanese people but also
tpan's Asian neighbors.
Today, however, we believe that the
situation has changed, and that Japan's
defense policies are changing with it.
Over the past 2 years, there has been a
significant change in Japanese attitudes
toward its own self-defense. First of all,
there is a greater awareness of the
Soviet threat to the region, and recent
public opinion polls in Japan confirm
this. The exist.ine of the Japanese Self-
e forces (JSDF) is now accepted
n overwhelming majority of the
Japanese people. Most of the opposition
have changed their attitudes on
the JSDF; while still claiming that the
JSDF is unconstitutional, even the
Socialist Party now says that it is legal.
I'm the most importanl over

it what 1 perceive as a
ding in Japan of the real
-ns why an enhanced de fort

years in -
■ ship, Japanese govern-
ments very often took tin- steps that
tid in the defense arena ami

. ere neces ■ ne

i the I '.S. Japan relations!)!.

Ij m Japan, g, leaders.

' ■ inioi

to realize that this is something
that must be done, not simply to "pacify
the Americans" but because it is in
Japan's own national interest. There,
therefore, has been a qualitative dif-
ference in the way the Japanese Govern-
ment and people look at defense issues.

There has been a quantitative dif-
ference as well. This Administration, as
you know well, does not focus on
defense spending per se. Our concern is
not with input but with output — Japan's
ability to fulfill the defense roles and
missions that it has set for itself, and
with which we agree. In the face of
severe fiscal constraints, Japan has
made a major effort to provide the
resources necessary to implement its
defense goals. Increases in Japan's
defense budgets have averaged about
5% in real terms during the years of the
Reagan Administration. (By comparison,
our own defense spending increased by
8% annually in the same period and that
of our NATO allies by only 2%.) During
the last Diet session, the government
passed what basically is a no-growth
budget, with an overall increase of only
0.5%. Yet in the middle of this austere
budget, defense spending rose by 6.55%.
Both we and the Japanese Government
recognize that this level of spending will
not be sufficient to allow it to implement
the Mid-Term Defense Plan or, within
this decade, the defense roles and mis-
sions that it has set out for itself. But
we recognize that the Japanese Govern-
ment is making a consistent effort to
enhance its self-defense capabilities in
the face of political and fiscal con-
straints.

Another major achievement during
the past 2 years is the Memorandum of
Understanding on Defense Technology
Transfer, which was signed just before
the President's visit last November. This
agreement will permit the export of
Japanese technology to the United
States to be used for military purposes,
and I should note that the United States
is the only country to which Japan will
permit the export of militarily applicable
technology.

International Political
and Economic Cooperation

The third area in which we have made
significant progress in our relationship
with Japan during the past 2 years,
and the area that forms the centerpiece
of our vision of the future of F.S. -Japan
relations, is international political and

"inic cooperation. 1 mentioned
earlier the Secretary's landmark speech

last September before the Shimoda con
ference, in which he indicated that the
time had come to stop thinking of our
relationship with Japan as a simple
bilateral relationship. Given our com- i
bined impact on the world, the Secretar
said that we should now look upon our
relationship with each other as an "inter
national partnership." In his historic
speech to the Japanese Diet, the Presi
dent amplified this theme on behalf of
our nation when he told the Members oi
Japan's Parliament that we should come
together to become a "powerful partner-
ship for good."

The basis for this thinking is clear. J
Together the United States and Japan
account for one-third of world gross na-*
tional product (GNP) and one-half of
free world GNP. Our combined share of
world trade is 22%. American and
Japanese banks together make over ona
half of all internationally syndicated
commercial loans. The United States
and Japan already rank as the first andl
second largest sources of resource flows
(official assistance and private lending)
to the Third World and the first and
third largest donors of official develop-
ment assistance. We soon shall be the
first and second largest shareholders in-
the World Bank, and we are the first
and second largest contributors of
refugee assistance. We are universally
recognized as leading sources of
technology. Japan and the United State*
are in the forefront of those calling for
new international trade round.

But it is not simply Japan's econom(
and technological strength that leads us< ,
to call for an "international" partnershi)
As I indicated earlier, Japan is moving
toward a greater international political (
role. Neither the United States nor any [
other country is pushing Japan in this
direction; Japan is moving on its own
and in accordance with its own national
interests. However, it is in our interest
to recognize that our relationship with
Japan is now entering a new phase, ana
that we should work to establish new
patterns of association with Japan,
based both in theory and in practice on
close cooperation and respect. This we
have done successfully during the past
2 years, and there are a number of ex-
amples of how the United States and
Japan have worked together on an intef
national level.

• The close working relationship
established between the President and
Prime Minister Nakasone helped lead 1
the success of the Williamsburg summit

• Coordination of our approach to
East- West relations across the board
has led to enhanced Western solidarity

•

EAST ASIA

4i general Soviet policy and arms con-
1 ol negotiations and helped stem the

3w of high technology goods to the

jviets.

• Increased Japanese foreign aid to
itions of strategic importance— such as

I urkey, Pakistan, and Egypt— has pro-
oted economic development in those
mntries and enhanced political stabili-

• Japan's impressive cooperation
ith us at the time of the Soviet shoot-
>wn of the Korean Air Lines flight
)07 proved Soviet responsibility, aided

combined search and recovery opera-
3ns, and condemned the Soviet action.

• Japan worked with us to provide
plomatic support to South Korea in

e face of the Rangoon bombing and
e north's proposal for tripartite talks.

• Japan has worked actively to pre-
tnt escalation of the Iran-Iraq war.

• Japan has been cooperative on
lird World debt issues and has ex-
nded support to the Philippines to aid
in the financial crisis it faces.

• Japan has indicated a willingness
join the President's African aid ini-

ative and help promote development in
|. e Caribbean Basin area.

Finally, I should add that we and the
tpanese work actively on a daily basis
I consult on a wide range of interna-
>nal political and economic issues. The
tpanese Embassy is among the most
■five in Washington in its diplomatic
i >ntacts with the State Department and
I .her executive branch departments, and
j am sure that the reverse is equally
I ue about our Embassy's contacts with
j e Japanese Foreign Ministry. In addi-
I an, senior specialists in the State

epartment and the Japanese Foreign
I inistry, usually led at the Assistant

?cretary level, meet on a regular basis
1 > exchange views and discuss our

^spective policies toward major regions
I* the world. So far this year, we have
; Bid extensive consultations on the

iddle East and Africa, and later this
I ?ar we will meet to discuss
I ?velopments in Latin America and
I urope.

HE CHALLENGES AND
I PPORTUNITIES OF THE FUTURE

s we look toward the future, the
nited States has a number of specific
olicy goals to:

• Strengthen U.S. -Japan coopera-
on and consultation on a wide range of
iternational political and economic

issues in order to promote peace and in-
ternational security, not just in Asia but
throughout the world;

• Continue to strengthen our
mutual security relationship, while
stressing the importance of Japan's
making a larger and accelerated con-
tribution to our common defense burden;

• Continue our major efforts to
achieve greater and more equitable
market access to Japan and work
together to maintain the free trade
system and counter protectionist senti-
ment in the United States and Japan;

• Consult and cooperate closely with
Japan in our mutual efforts to foster an
open world trade and investment system
and to promote economic development
and financial stability in the developing
nations; and

• Continue to expand our educa-
tional, cultural, and scientific relations.

As we seek to accomplish these
goals, I see three major challenges
before us:

• Gaining a strengthened commit-
ment by both countries to the free trade
system;

• Ensuring that we treat Japan as
we would any other ally and friend; and

• Using the fundamentals and
overall importance of our relationship to
solve the more transitory problems of
the moment.

I mentioned earlier that, in the case
of defense, we are convinced that Japan
is now genuinely and sincerely moving in
the direction of an enhanced defense ef-
fort. Japan's intentions or motives are
not in doubt. Unfortunately, I cannot yet
say the same about our trade problems.
There still is a widespread perception
that Japan is not committed to allowing
our companies and products fair and
equitable access to its market and that
Japan makes concessions only begrudg-
ingly and under pressure. Two editiorial
comments from opposite ends of the
Pacific reflect this notion well. In
describing the capital market discus-
sions, Japan's Niho7i Keizai Shimbun
described on March 27 of this year what
it called Japan's

. . . conventional negotiating style in deal-
ing with the United States, namely, the style
of "delaying, haggling and seeking to
minimize changes in the status quo." If this
style continues, the U.S. dissatisfaction will
increase rather than diminish, resulting in a
further aggravation in U.S. frustration, and
this cycle will never stop.

Two weeks later, the Washington Post
commented on the beef and citrus
discussions, saying

By resisting desperately on minor mat-
ters such as beef imports, and pushing them
to the brink of crisis before compromising,
Japanese negotiators create an impression of
obduracy. It does not serve Japanese in-
terests to encourage Americans to think of
trade with Japan as a one-way street in
which even the most modest concessions are
made grudgingly and only after inordinate
delay. . . . That impression is damaging to
Japan. ... In the beef case, the Japanese
allowed the dispute to drag on much too long
at too great a political cost.

Another challenge in the future is to
learn how to treat Japan as we would
any other ally or friend. The quotations
I just used illustrate how perceptions in
both countries focus on pressure and on
response tactics. This is not the only
way to conduct business. Calm, con-
sistent attention to issues before they
are politicized should work to eliminate
the cyclical and emotional swings in our
relationship. We have, with few excep-
tions, attempted to do just that during
the past 3 years. In my view, we must
build upon this approach so that future
generations of leaders will not be so em-
bittered by the battles that a mature
dialogue and the accomplishment of
other important objectives in our rela-
tionship become impossible.

Particularly in trade matters, I
welcome the fledgling indications that
some circles in Japan see it as in their
own national interest to open completely
to foreign products and services. The
leaders of Japan have to foster this
growing recognition.

In terms of international political
cooperation, however, the obligation is
more on our side. If we want Japan to
work together with us as a close and
equal partner on the international stage,
we must act accordingly. We must treat
Japan as an equal, consult closely, and
be willing to listen — and in some cases
modify — our policies and actions when
Japan disagrees. In the global economic
arena, Japan already is speaking its
mind openly to us. However, Japan has
been less willing to do the same in inter-
national political affairs. When the day
comes when it does so, it may come as a
shock to many Washington policymakers
who are accustomed to a quieter Japan.
That day will come, and I hope that we
will be flexible and mature enough to
receive it as a sign of a successful policy.

The final challenge that we face is to
make sure that, when we deal with

eptember 1984

EAST ASIA

Japan on transitory individual issues, we
keep our overall interests in mind and
utilize the importance of our relationship
to help achieve progress on those
outstanding issues. Our trade interests
are important to us, but they are not the
only part of our relationship. Com
ly, our security interests in Japan are
extremely important to us, but tin
not mean that we should ignore our in-
terest in securing equitable access to
Japan's market. We should not be forced
to chi "lion like, one aspect of

our relationship over another. Our rela-
tionship with Japan is without question
one of our most important and vital rela-
tionships, and it will be increasingly so
in the future. If we keep the overall im-
portance of that relationship in mind, we
can make even greater progress in
resolving outstanding issues.

'The completed transcript of the hearings
will be published by the committee and will
be available from the Superintendent of
I locuments, U.S. Government Printing Of-
fice, Washington, D.C. 20402. ■

U.S.-Asia Security: Economic
and Political Dimensions

by William A. Brown

Address befort the U.S.-Asia In
stitute on June 18, 1984. Mr. Brown is
Acting Assistant Secretary for East
Asian and Pacific Affairs.

Although formed only a few short years
ago, the U.S.-Asia Institute has already
made a large contribution to a deepen-
ing of understanding between the
peoples of the United States and Asia.
Your leadership, headed by your
distinguished chairman, Mr. Kay
Sugahara, and ably assisted by co-
founders Esther Kee, Joji Konoshima,
and others, is outstanding. Your
organization, through its research, sym-
posia, and publications, serves as a wise
adviser in meeting the challenge of
achieving belter relations between the
I nited States and the countries in the
East Asia and Pacific region.

Overview

The subject for mj address today is the
political and economic dimensions of
U.S.-Asia security. That ancient and
very wise Chinese sage, Lao T/.u. said:
ho knows does not speak. He who
know." I, therefore, ask
your kind indu

from Europe
and the

arily looked to
both Easl and West. World War II ac-
ted the trend away from paying so
much ward

if greater b n. Our

tied to events in i
as it is to our more traditional relations

in We rope.

These last four decades since the
end of World War II have witnessed
great changes that have drawn the
United States ever closer to East Asia.
Peaceful trade and commerce have ex-
panded to such a degree that U.S. trade
with the East Asia and Pacific region
has outstripped our trade with Europe.
The dynamic growth of the Pacific na-
tions has transformed them into major
markets for U.S. products, services, and
capital.

There have been two major wars.
And we have learned our lessons. We
are resolved to maintain our military
posture and presence as a Pacific power
so as to deter armed aggression against
our allies and friends in the region. Im-
migration patterns have shifted; in re-
cent years, along with Latin America,
the largest number of immigrants have
come from Korea, Taiwan, the Philip-
pines, and the former Indochina coun-
tries. These hardworking people greatly
enrich our culture and economic life.

Economic Dimensions

Let me now comment on the economic
dimensions of U.S.-Asia security. No
society can be truly secure without a
strong economy. A flourishing economy
provides the necessary resources for a
i rong defense. Breakthroughs in the
private sector often have application in
defense-related industries, but more

merally, a growing, vibrant economy
has certain intrinsic advantages: it
motivates people to become involved, to
increase production, and to be concerned
about the quality of the product. It also

stimulates education, and a better
educated workforce results in a better
educated fighting force.

The Republic of Korea is a good ex-
ample of the correlation between
economy and security. While North
Korea has maintained over the years a
20% of GNP spending rate for so-called
defense. South Korea, because of its ex-
panding economic strength, now is at
rough equivalence in military expendi-
tures. If the trend continues, there is no
doubt the South will right the current
imbalance in military forces. Although
the U.S. guarantee for the Republic of
Korea's security is an important factor
in this equation, the commitment of the
South Korean people to hardworking
economic growth is the key ingredient to
an increasingly strong defense posture.

On a broader plane, our growing
economic ties with our friends and allies
in the East Asia and Pacific region pro-
vide additional benefits from a security
standpoint. Commerce is a very strong
tie that binds. It helps cement relation-
ships and makes it that much harder for
adversaries to drive a wedge between
us. Across the sealanes of the Pacific to-
day are shipped a great deal of each
market country's wealth. They have
become, in fact, the sinews and arteries
of a larger system, and— needless to
say— crucial to the security of this
sytem and its parts.

Such close and very extensive
economic ties inevitably produce some
friction, and I suppose our trade with
Japan— one of our closest and most im-
portant friends in the world— is the best
case to illustrate this. There are some
important trade problems, and issues
such as Japan's quotas and high tariffs
on agricultural and forestry products are
illustrative of the difficulties that we
have in achieving the same kind of ac-
cess to Japan's market that Japanese
companies have to ours. We will con-
tinue to emphasize strongly to the
Japanese the importance of removing its
remaining barriers to the export of U.S.
goods and services. And yet, such prob-
lems must be kept in perspective.
Because our economic ties are part of a
much wider, deeper relationship, with a
security dimension, we must never let
disputes eat away at the trust so
necessary for cooperation to meet com-
mon threats.

1 beg your indulgence to cite a few
statistics to show just how phenomenal
the growth in our economic ties has
been over the last few years.

• U.S. investments in the region
rose an estimated $4 billion in 1981 to
$26. 6 billion.

•;

Department of State Bulletin

EAST ASIA

• Also in 1981, before the recession,
' e $128 billion trade with East Asia

!d the Pacific signified a 12.2% in-
case over the previous year. This com-
«' res with a 10.9% growth in our
>rldwide trade.

• In 1982, in the recession, trade

th the region declined 1% compared to
7.8% decline worldwide.

» In 1983, the first year of recovery,
e $136.5 billion trade with East Asia
d the Pacific was up 8% compared to
5t 0.5% worldwide. It is now 24%
•ger than our trade with Western
irope and comprises 30% of our total
fide. ASEAN [Association of South
list Asian Nations] by itself is our fifth
(Tgest trading partner behind Canada,
Jpan, Mexico, and the European Com-
iinity.

Mitical Dimensions

It me now turn to the political dimen-
s>ns of U.S. -Asia security. No society
In be secure if it is torn by internal
S'ife. No society can successfully cope
I th threats from the outside if it is
»>ak within. And political strength
( rives from governments being respon-
s e to the needs of their people. Over

< years ago, Dr. Sun Yat-sen asked:

Is there any just reason why we should
( aose autocracy and insist on democracy?
I s, because with the rapid advance of

< ilization people are growing in intelligence
; i developing a new consciousness of
if.... Which is more appropriate.

s tocracy or democracy? If we base our judg-
l jnt on the people's intelligence and ability,
(• come to the conclusion that the sovereign-
i of the people is far more suitable to us.

Just as our society today is influ-
'i ced by Asian religious and cultural
aas, so too have Asian societies,

■ pecially after shaking off the yoke of

i lonialism, been influenced by Western

■ litical ideas.

We are justifiably proud of our
ii mocratic system and feel most com-
: rtable in dealing with others who
I are similar values. Happily, many

untries in the region have attained or
i e moving toward stable democracies,
le institutional growth and broad ac-
ptance of Japanese democracy, for ex-
nple, is something in which the
;i ipanese people can take pride, and we
I ill continue to applaud — and encourage
• appropriate ways — movement toward
feer societies in the Republic of Korea,
e Philippines and elsewhere. Our
lique relationship with Australia and

New Zealand is based upon shared
history, values, and generally compatible
interests and objectives. Anchored by
the ANZUS [Australia, New Zealand,
United States pact] treaty, our contacts
with these two old friends continue to be
close and harmonious. We are encour-
aged by the political growth in the
Western tradition of the emerging na-
tions of the South Pacific. We look for-
ward to full self-government in the not
too distant future for the Marshall
Islands, the Federated States of
Micronesia, and Palau.

Southeast Asia provides an in-
teresting example of the dynamic in-
teraction between political, economic,
and security factors. Two decades ago,
our Southeast Asian friends' foremost
threat was communist subversion foster-
ing internal disorder. The economic and
political progress of these countries has
reduced this threat in most countries to
manageable proportions. Finding their
ability to penetrate and influence inter-
nal developments sharply curtailed, both
the Soviet Union and Vietnam have
turned to conventional military forces
and intimidation as their principal policy
tools. The resulting threat is real and
must be met. But the wave of the future
clearly does not lie in the regimented
societies where experience starkly
reveals the central weakness of their
governing systems. Such one-
dimensional systems provide neither
economic nor political incentives or
development.

The U.S. Role

There is a psychological dimension of
the U.S. security role that I would also
like to touch on briefly. For a time after
the Vietnam war, there were many who
feared that isolationism would again
move America to withdraw from her
commitments as a Pacific power. Many
were concerned that U.S. foreign policy
in the Pacific would resemble that so
well-described by Winston Churchill,
speaking about his own country in the
mid- 1930s: "Decided only to be unde-

cided, resolved to be irresolute, adamant
for drift, solid for fluidity, all-powerful
to be impotent."

Events fortunately proved that
America was not returning to isola-
tionism. While the lessons of the Viet-
nam war will provide debate material
for years to come, the negative conse-
quences of that war are plain for all to
see — namely a Vietnam under
repressive rule which invaded, occupies,
and now even colonizes parts of its
neighbor Kampuchea; provides the
Soviets with air and naval facilities in
the region; and is responsible for the
flight of more than a million and half
refugees from Indochina since 1975.

Such consequences challenged the
United States to respond, and I believe
we have. Our alliances with Japan, the
Republic of Korea, Australia, New
Zealand, the Philippines, and Thailand
are stronger than ever. Our political ties
to new friends, such as China, and old
friends such as the ASEAN states, are
crucial in dealing with both security and
economic challenges. As Secretary
Shultz stated before the World Affairs
Council of San Francisco last year, the -
U.S. role in the East Asia and Pacific
region is unique. "We are the one nation
of the region with both a worldwide
view and the capacity to implement a
worldwide policy. As a great power, we
have great responsibilities. We have
borne them well, and we must continue
to do so. . . . The United States will re-
main a Pacific power. Although specific
tasks may change, our overall respon-
sibilities will not be diminished in impor-
tance nor shifted on others."

It is not just happenstance that over
the past year, the President of the
United States has made two major trips
to Asia — to Japan and the Republic of
Korea, and to China, and hopes to be
traveling to Southeast Asia as well. The
President has a deep and abiding com-
mitment toward strengthening U.S. ties
to the Pacific. As he commented recent-
ly in Beijing: "I see America and our
Pacific neighbors going forward in a
mighty enterprise to build strong
economies and a safer world." ■

leptember 1984

ECONOMICS

World Economic Prospects

by W. Allen Wallis

before the American
< 'hum her of( nmmerce in Santiago on

, 27, 1984. Mr. Wallis is Under
Secretary for Econom ic Affair*.

I am happy to be in Santiago. This is my
first visit, and I am impressed already

: itv of the city and the
hospitality of its people. In addition, it is
an honor and a pleasure to have this op-
portunity to address you.

I will first discuss prospects for the
world economy and U.S. policies to sus-
tain, strengthen, and spread the eco-
nomic recovery on a global basis.

Second, I will discuss the effects of
recovery on developing countries, a sub-
ject that this audience may find of par-
ticular interest.

Finally, I will comment on problems
related to international debts.

U.S. Recovery and
Global Outlook

Largely as a result of the strong U.S.
recovery, the world economy is in much
better shape than it was a year and a
half ago. The recovery is increasingly
picking up strength in the other in-
dustrialized economies, international
trade is again growing, and we have
passed the worst of the current debt
problems of some developing countries.

With strong growth in U.S. incomes
and production, the U.S. market for
foreign goods expanded rapidly during
1983. The value of imports in the fourth
quarter was 19% above a year earlier

grew a further 13% in the first
quarter of this year. This growth in-
duced a recovery in global international
trade. The strong dollar has substantial-
ly improved the competitive position of
our trading partners, allowing them to

advantage of the growth in our
market and to compete effectively in
third-country markets. The widening of
deficit, estimated at a

billion in- . i ure of the

provided to other countries.
■nportant as this trade
stimulus psychological im-

pact of the U.S. recovery, i ough

recession and financial crisis continui
in; countries, the Unit

| turn. Our
rei Tied confidence and
incern about the world I
cial system.

The U.S. recovery seems likely to
continue to be robust throughout 1984.
Consumer confidence is high and, ac-
cording to recent surveys, businesses
plan the largest real increase in invest-
ment spending since 1977— over 9%.
Real output grew 9.7% in the first
quarter. The preliminary estimate of
real GNP [gross national product] in-
dicates growth in the second quarter at
the more sustainable rate of 5.7%. We
expect that growth will continue at a
moderate and sustainable pace for the
rest of the year.

Except for Canada, whose recovery
has paralleled that in the United States,
the upturn in the rest of the industrial-
ized economies has been less vigorous
than in the United States. Nevertheless,
there is increasing evidence that the rest
of the industrialized world is recovering.

The strength of this recovery varies,
of course, from country to country.
Growth is greatest in those economies
which have taken prompt and effective
action against inflation. In Japan, where
inflation in consumer prices has been
only about 2%, growth is estimated to
have been about 4.5% from the fourth
quarter of 1982 to the fourth quarter of
1983. Both Japan and Canada benefit
from rapid growth of their exports to
the United States and should sustain
strong growth in 1984. In Europe,
growth improved in 1983, notably in
Germany and the United Kingdom, but
was still disappointing. Germany, which
has brought down its inflation rate to
about 3%, had a rather sluggish
recovery in 1983 of 3%, but probably
will grow more than 3% this year.
Europe's relative slowness to recover
reflects, in large measure, the continu-
ing problems of France. The French
economy should start to grow this year,
so the growth of Europe as a whole
should strengthen in 1984. The OECD
[Organization for Economic Cooperation
and Development! now expects Euro-
pean growth to reach 2.25% this year,
up more than one percentage point from
last year.

Just as the recovery in the in-
dustrialized economies has been based
on success in reducing inflation, so our
ability to sustain it will depend on suc-
cess in keeping inflation from ac-
celerating again. The signs so far are
good. U.S. consumer prices have risen

only about 4.5% in the last 12
months, only one percentage point above
the previous 12 months and far below
the double-digit rates of increase in 1979

and 1980. The low rate of inflation dur-
ing the past year has been reinforced b]
falling energy prices and agricultural
prices. The inflation rate for other good
and services is about 5%, a level we ex-j
pect to see during the remainder of
1984. With a stable monetary policy
keeping expansion under control, con- I
tinued moderation in the growth of
wage rates and further good perfor-
mance in productivity should help keep
inflation down.

The outlook for inflation in the rest
of the OECD is similarly good. Even thi
high-inflation countries, notably Italy
and France, are showing significant im-
provements. Consumer prices for the
OECD as a whole are expected to con-
tinue to advance at about a 5% pace in
1984.

Another factor affecting the
economic outlook will be the exchange
rate of the dollar. Recent movements in
this rate have been dominated by inter-
national capital movements. With net in
ternational capital flows swinging sharp
ly toward the United States in 1983, th«
dollar appreciated further despite a
widening deficit in both trade and cur-
rent account. The trade-weighted
average value of the dollar rose during
the year to a fourth quarter level 6.5%
above a year earlier and 26.5% above
1981. (Adjusted for differences among
countries in rates of inflation, the corref
sponding increases were 4.5% and
20.3%.) There is, however, a good deal
of doubt that the present level of the
dollar will persist, in view of the pros-
pects for a further widening of the U.SJ
deficit on current account.

If the value of the dollar should
fall — and far be it from me to predict
whether it will or will not — the effect o
the world economic outlook would be
mixed. For the United States, our inter
national competitiveness would be im-
proved, stimulating our exports and
products which compete with imports.
Our prices, however, would rise faster
for a while. In the other industrialized
countries, efforts against inflation woul
be assisted by a fall in the dollar, but
they would need to rely more on
domestic demand and less on their ex-
ports for their growth. On balance, an
orderly decline of the dollar would prob
ably not affect the size of the recovers
in the industrialized countries much, bu
it would affect its composition.

These facts that I have cited show
the U.S. recovery is strong and sustain-
able, that recovery is spreading througl
the world, and that trends in interna-
tional trade are encouraging.

Department of State Bulleti*

ECONOMICS

fects on Developing Countries

l iat will be the effects of recovery on
i veloping countries? Obviously, the
lovery in the industrialized world

Lightens prospects considerably for the
veloping countries. A number of these
.mtries have had severe debt problems
d have had to make major ad-
itments in imports to deal with their
ancial crises. Non-oil developing coun-
es are estimated to have cut their cur-
;J:it account deficits by about $20 billion
t year. A major contributor to the im-
Dvement was the gain in these coun-
es' trade balance with the United
ates— about $13 billion. About $9
lion of this was due to increased ex-
its to the United States. The trade
lance between the United States and
iile, for example, moved from $837
Hion in favor of the United States in

IJ80 to $241 million in favor of Chile in

I S3.

[ The IMF [International Monetary

I nd], assuming only a moderate 4.25%
t:e of growth for the industrialized

t momies in 1984, projects growth in

I I dollar value of their imports to be
|out 7.5%, in sharp contrast to declines
i the previous 4 years. Exports of non-
l developing countries are expected to

i Tease about 10.3% in 1984. The
rength in the U.S. economy, which is
i ich greater than was anticipated, may
] ike this figure even higher. Although
( pansion in a number of developing
c jntries will be limited by financial con-
s -aints and the need for further ad-
rj itments of their policies, on the whole
j owth should improve this year. The
] .est estimates by the World Bank are
1 it growth in the developing countries
i a whole will rise to about 3.75% in
■84, compared to less than 1% last
; ar. As you know, growth in Chile—
' lich was a negative 0.8% last year— is
] ojected by the Chilean Government to
I in the 4%-5% range in real terms
I is year. Thus, prospects are bright for
i veloping countries overall— at least for
lose with sound economic policies.
If the global recovery is to be sus-

ined and strengthened, steady, non-
: flationary growth within individual
j untries is required. The United States
lis made substantial strides, but we still
live more to be accomplished. For ex-
Inple, the United States needs to cut its
s;cal deficits, as do many other coun-
ties. European countries, in particular,

,n improve their prospects by increas-
t g the flexibility of their labor markets.
I|ll countries need to establish credible,

ininflationary monetary policies. Many
''^veloping countries need to free up

their economic structures, adopt realistic
exchange rates, and encourage redeploy-
ment of resources to the foreign trade
sector.

Effects on International
Indebtedness

In conclusion, some remarks about inter-
national indebtedness. In the latter part
of 1982, major international debt prob-
lems came to a head. There was wide-
spread fear of defaults which would lead
to grave damage to the world financial
system. But these difficult problems
have been managed through interna-
tional cooperation involving debtor and
creditor governments, private lending
institutions, and the International
Monetary Fund.

Countries with heavy burdens of
debt service may have prolonged periods
of adjustment ahead. We believe, how-
ever, that the worst of the world debt
problems may be behind us. We have
proven that the major industrialized na-
tions, working in cooperation with the
IMF and major international banks, are
able to coordinate their policies to assist
those nations unable to service their
debts.

For their part, many debtor coun-
tries have shown the ability and will to
act responsibly and to take appropriate
action to redress their balance-of-
payments positions. Chile, of course, is
among the countries in this category.
We are seeing significant reductions in
the current account deficits of many na-
tions, with the total current account
deficits of non-oil developing countries
having been cut very substantially from
1982 and 1983. In the case of Chile, the
current account deficit was slashed from
almost $5 billion in 1981 to about $1
billion in 1983. With the IMF quota in-
crease now in place, establishment of en-
larged general arrangements to borrow,
and the provision of new loans to the
IMF by members of the Bank for Inter-
national Settlements and Saudi Arabia,
we are pleased to see that the IMF has
been adequately financed to conduct its
important task.

We are now entering what I hope
will be the final phase of the debt prob-
lem. It is in this phase that the debtor
countries will have to work out their
debt problems and resume reasonable
rates of economic growth.

This phase will require action by
both debtors and creditors in a number
of areas, including:

First, the continued application of
now-established procedures to assist
those countries whose debt problems are
just emerging;

Second, continued adjustment by
the debtor countries;

Third, provision of adequate capital
inflows to those countries making ade-
quate adjustments, including the import-
ant provision of financing for trade;

Fourth, continued economic
recovery in the industrialized nations,
control of protectionism, and new ef-
forts to liberalize the world trading-
system.

The problem of excessive depend-
ence on borrowed capital can only be
resolved effectively by the developing
countries themselves. However, interna-
tional direct investment can help. To
reduce the likelihood of future debt
crises, foreign direct investment must
become a more important source of
capital for the developing countries.

I remain confident that we will be
able to respond to emerging debt prob-
lems. Procedures for dealing with these
problems are in place and the members
of the international financial system,
both governments and commercial
banks, have shown the necessary resolve
and flexibility. Economic readjustment is
difficult and expensive but the economic
future of most major developing coun-
tries is bright if they follow appropriate
policies. Both they and we have a stake
in the preservation and strengthening of
the international financial system, which
can serve as an efficient global allocator
of investment funds.

Conclusion

In summary, worldwide economic
recovery is under way, led by the strong
recovery in the United States. World
trade is expanding. The benefits are
spreading to the developing countries.
Those with market-oriented development
policies are receiving the greatest
benefits from the expansion and will
continue to do so. The problems of pro-
tectionism and indebtedness pose
challenging tests to both the developed
and developing countries. These tests
can best be met by cooperation and
negotiation. The challenges of sustaining
growth in the world economy do not re-
quire us to devise radical new economic
instruments or strategies. What is
needed is an application of sound
economic principles, good sense, and a
great deal of patience. ■

sptember 1984

ECONOMICS

The Bretton Woods Legacy:
Its Continuing Relevance

by Richard T. McCormack

Address at a conference com-
memorating the 40th anniversary of the
signing of the Bretton Woods agreements
in Bretton Woods, New Hampshire, on
July 13, 1984. Mr. McCormack is Assist-
ant Secretary for Economic and
Business Affairs.

I am here today to acknowledge the
debt of people of my generation to the
work done here 40 years ago. My
generation has never known soup kitch-
ens or bread lines or depression of the
type experienced in the 1930s. This is
due in no small part to the outstanding
work that was done here in setting up
an international monetary system
toward the end of the Second World
War.

Forty years ago, a group of
distinguished and farsighted men
erected what has become a living
historical landmark of international
economic cooperation. The structure
they erected enabled the world economy
to achieve an unprecedented four
decades of reconstruction, growth, and
change. Today, the Bretton Woods in-
stitutions, having proven both resilient
and flexible, are in the forefront of our
efforts to resolve current international
economic problems.

Some of those who helped to build
this structure 40 years ago are here
tonight. We pay tribute to them and
their fellow architects and salute the
men and women who, over the subse-
quent 40 years, worked within and built
upon the foundation laid down here.

The wisdom and farsightedness of
the architects of Bretton Woods are the
more remarkable when we consider the
background against which they labored.
It is sometimes noted that their con-
ference took place soon after the landing
of the Allied forces in Normandy. But,
as you know, the gestation period of the
Bretton Woods structure began earlier.
when tlii- alliance was struggling for its
very survival. Remarkably, despite
preoccupation with the if the

war, these men were able to look to the
future and to see ally new

cooperai tary and

financial structure was needed to rebuild
the world economy and secure a lasting
peace.

Developing a Stable
Monetary Order

What did the Bretton Woods founders
believe they had accomplished? How suc-
cessful were they? What elements of
their design are most relevant to our
concerns today? Let me begin with the
quote from U.S. Treasury Secretary
Morgenthau reproduced in our program:
"What we have done here in Bretton
Woods," Morgenthau said, "is to devise
machinery by which men and women
everywhere can freely exchange, on a
fair and stable basis, the goods which
they produce with their labor." A com-
monplace observation? Perhaps it seems
so today. But compare the ideal to the
then-existing reality.

The interwar period had left interna-
tional economic intercourse in virtual
anarchy, with countries attempting to
defend themselves against external
shocks (and, indeed, to export their
unemployment to others) through all
kinds of devices— exchange rate
manipulation, multiple rates and ex-
change controls of various kinds, import
barriers, and restrictive bilateral
agreements. In this context, Morgen-
thau's simple claim must have seemed
visionary indeed.

The first order of business, then,
was to bring countries together in a
structure that would substitute stability,
cooperation, and open markets for the
existing chaos. At the same time the
founders wanted to leave individual
countries scope to pursue their
legitimate individual economic objec-
tives. Balancing these two goals-
discipline and cooperation versus
freedom of action— was one of the most
fundamental and difficult problems fac-
ing the negotiators 40 years ago.

The Bretton Woods founders be-
lieved that these goals could best be
reconciled within a system of fixed but
adjustable exchange rates. They had
very much in mind the experience of the
interwar period with its turbulent spells
of flexible exchange rates and "beggar-
thy-neighbor" devaluations. Therefore, in
their system, countries were committed
to the maintenance of exchange rates
within narrow margins around agreed

parities, and the International Monetarf
Fund (IMF) was to exercise discipline
over changes in these parities.

Did Bretton Woods Fail?

Although this exchange rate structure
provided the foundation for the world's
monetary system for almost 30 years, n
is now generally believed to have had
fatal defects which caused it to be aban
doned by the major countries a little
more than a decade ago— in practice, ill
1973; in law, with the second amend-
ment to the IMF articles in 1976.

Many learned writers have written
countless pages on the reasons why this
happened. The consensus, as I under-
stand it, is that the system proved in
practice to be too rigid in the face of
changing conditions. Currency conver-
tibility, fixed exchange rates, and in-
dependent national macroeconomic
policies become increasingly inconsistent
with growing economic interdependence
The Bretton Woods escape hatch— ad-
justment through major exchange rate
realignments only after fundamental
disequilibrium had clearly emerged—
proved unworkable in a world economy
where vast amounts of capital can move
relatively freely across the exchange
markets to hedge or speculate on an an-
ticipated realignment.

Of course, the Bretton Woods
founders did not foresee— they could no
reasonably have foreseen— the vast in-
crease in funds free to cross and recros>
national borders over the postwar
decades. And it is clear at least some oi
them gave far less weight to the benefit!
of free capital movement than to those
of free trade. To their credit, the
founders viewed their arrangements as
experimental, not immutable. If
anything, those who followed ought
probably to have modified the system a*
an earlier stage, before it collapsed.
Did the collapse of the Bretton
Woods exchange rate system signify
that the founders failed in their efforts
to construct an international monetary
system? In terms of their most funda-
mental objectives, the answer is no, thej
did not fail.

After all, the original exchange rate
system provided sufficient stability and
confidence over a quarter century so
that nations could move from the
chaotic, restrictive, prewar system to
successively greater currency conver-
tibility, vastly reduced barriers to the
flow of goods and services, and freer
capital movements. Largely under the
aegis of the IMF, the major trading

Department of State Bulletir

ECONOMICS

i tbuntries of the world have adopted a
;gime of free financial flows among na-
| ons. These developments together pro-
( ided the foundation for a rapid expan-
on of trade and interdependence, in
irn helping to produce an astonishing
jcovery from war and a sustained in-
rease in production and material well-
eing. The removal of exchange controls
1 accord with the Fund's articles has
een instrumental in achieving the six-
)ld increase in world trade (in real
jrms) that has occurred since the end
f European reconstruction in 1953.
iconomists, of course, complain about
ie misallocation of resources which oc-
jrred with the growing exchange rate
lisalignments of the latter part of the
eriod; these misalignments reflected
ur failure to introduce more flexibility
lto the operation of the system as con-
itions changed.

Even more important, gains from
lat earlier period — convertibility and
pen markets — were not lost as the
/stem was transformed by the force
majeure of the marketplace to a more
exible exchange rate system. Compare
lis evolution with the monetary
isintegration of the interwar period,
id you will see clearly the lasting
?nefits of Bretton Woods. The fun-
imental principles of international
ionetary cooperation survived and are
;ill operating as we work to improve
ur economic performance with the
resent exchange rate arrangements,
he principles that exchange rates and
ther international monetary issues are
matter for mutual concern, not
■ I nilateral decisions; stable domestic
olicies are fundamental to international
ionetary stability; and that the reper-
jssions of one country's policies on
nother country's well-being cannot be
piored are still the core of our present
ystem. This is one lasting legacy — more
nportant than the details of any ex-
hange rate system — that the Bretton
Vbods founders left us.

Tie IMF and the Debt Crisis

Tiey also left us with an institu-
ion — the IMF — that is at the center of
■ur efforts to deal with current interna-
|ional financial problems.

In recent years nations all over the
vorld have found their efforts to
lanage their economic affairs swamped
>y a unique combination of adverse cir-
umstances — dramatically increased oil
irices followed by worldwide inflation, a
•ollapse in commodity prices, the worst

world recession since the 1930s, and
historically very high interest rates.
When oil prices shot up, the first reac-
tion of oil-importing developing coun-
tries was to borrow to stave off im-
mediate economic dislocation. And with
liquidity abundant and real interest rates
low or negative in the late 1970s, they
continued to borrow. Thus, by the end of
1982, when the crisis peaked, their in-
debtedness had reached $600 billion,
having quadrupled in a decade. At that
point, we were confronted with a
widespread debt crisis, as nation after
nation sought IMF assistance and debt
relief.

Some observers argue that the Fund
began to take on a new role in this
crisis, that of financial organizer for
troubled debtor nations. Indeed, for a
troubled world, I know for certain that
it has become the linchpin of our
strategy for dealing with this crisis, a
strategy endorsed last year by the
Williamsburg summit. The IMF is

crucial to four of the basic elements of
that strategy and closely related to the
fifth.

First, the Fund obviously provides
its financial support to troubled nations.

Second, it is the one institution with
the expertise, experience, and interna-
tional acceptance to encourage and
guide debtor governments toward sound
adjustment of their domestic economies
to the new world realities. Such an ad-
justment program is unquestionably the
most vital step in addressing a country's
financial crisis, because it sets the
economy on a sustainable economic path
for the future.

Third, emergency official lending to
debtor nations is almost invariably
bridged to an approved IMF program.

Fourth, adequate continuing flows
of commercial bank financing, especially
following a crisis, require the im-
primatur and, increasingly, the en-
couragement of the IMF; later such
flows depend crucially on the success of

Assistant Secretary for Economic
and Business Affairs

Richard T. McCormack was born in Bradford,
Penn., on March 6, 1941. He received his
B.A. degree from Georgetown University in
1963 and Ph.D. magna cum laude from the
University of Fribourg in Switzerland (1966).

Mr. McCormack began his career as a
staff member of the Peace Corps and has
been a consultant to a number of other U.S.
Government agencies and private corpora-
tions.

From 1969 to 1971, he served at the Ex-
ecutive Office of the President in a number of
capacities. As a senior staff member of the
President's Advisory Council on Executive
Organization, he was responsible for drawing
up the plans for the subsequently established
White House Council on International
Economic Policy. Mr. McCormack also served
as special assistant to former Governor
William Scranton at the INTELSAT negotia-
tions at the State Department in early 1969.
He was at the American Enterprise Institute
from 1975 to 1977.

In 1977 Mr. McCormack was deputy to
the Assistant Secretary of the Treasury for
International Economic Affairs. Following his
tenure at the Treasury, he was a consultant
to the White House office of the Special
Trade Representative, where he analyzed
potential international commodity
agreements.

From 1979 to 1981, Mr. McCormack
served as a legislative assistant to Senator
Jesse Helms. And from December 1981 until
his confirmation by the Senate, he was a con-
sultant to the Department of State on inter-
national economic matters.

•1 *$h 3

^«r\

(Department of State photo)

He was sworn in as Assistant Secretary
for Economic and Business Affairs in
February 1983.

Mr. McCormack is the author of Asians
in Kenya and a number of other articles and
monographs on foreign affairs. ■

September 1984

ECONOMICS

the IMF ' adjustment program,

rhtadd i ' hedulings,

nd private, also necessitate
. . ventual repaymenl
.1 IMF program.)
The fifth element of the debl
strategy— strong industrialized-coui
economic n ' it'1 open markets—

obviously is not the direct responsibility
of the IMF. Nevertheless, it is of great
significance to the success of the Fund's
objectives, and 1 can assure you that the
Fund's managing director, for one, has
imid about making Ins views
known to the industrialized nations
whose policies govern the course and
strength of the recovery.

Thus, it is clear that the Fund has
become "a" and perhaps "the" key actor
in managing the debt crisis. Certainly in
handling this grave problem it provides
an invaluable tool which we would in all
probability have to create ourselves if
the Bretton Woods participants had not
had the foresight to do it for us.

Finally, if the performance under
the current exchange rate system is to
be improved, then we must have greater
convergence in economic performance
among major countries toward more
stable and noninflationary economic

i h in the interests not only of the
domestic economy but the international
economy. The Fund must have a central
role in this effort. In particular, we are
trying to strengthen the process of Fund
surveillance over all countries'
policies— not just those in debt to the
Fund. The Fund will certainly be cen-
trally involved in any future evolution of
the system.

The IBRD and Changing
Development Needs

Let me return now to Secretary
Morgenthau's statement. He went on to
say that: "We have taken the initial
steps through which the nations of the

rid will be able to help one another in
economic development to their mutual
advantage and further enrichment of
all." He was talking, of course, about the
i- titution, the
national Bank foi Reconstruction
and Development (IBRD or World
Bank), wl i ojective woul

be 1 'iig-term loans

for the reconstruction of Europe and the

The IBRD, of course, was never in-
ede privab
mulate or iu] .

ifi projects that could

In the event, the magnitude of
postwar reconstruction turned out to be
beyond the resources of the IBRD. With

ib largely taken over by the Mar-
shall Flan, the Bank turned its attention
to the problems of the developing world.

Over the years the Bank has
responded to the changing needs of both
its borrowing and lending members. For
example, once focusing on capital in-
frastructure projects such as roads,
railways, and telecommunications, the
Bank now pays greater attention to
social infrastructure needs and to those
investments which directly affect the
population and serve to make them
more productive. Institutionally, too, the
IBRD has evolved to meet the man-
power training needs of borrowers. In

1955 the World Bank created the
Economic Development Institute to pro-
mote education and training. Then in

1956 the International Finance Corpora-
tion (IFC) was established to promote
growth in the private sector and to
mobilize domestic and foreign capital for
this purpose.

In 1960, specifically to meet the
development needs of the poorer bor-
rowers and to lend to them on terms
that would bear less heavily on their
balances of payments, the International
Development Association (IDA) was
established; the following year the IFC
articles were amended to allow that
agency to make equity investments.

To address the dynamic complexities
of an interdependent world economy,
the Boards of Governors of the World
Bank and the IMF established in 1974 a
Joint Ministerial Committee on the
Transfer of Real Resources to Develop-
ing Countries, better known as the
Development Committee. Today this
committee through task forces is pro-
viding a forum to examine both conces-
sional and nonconcessional flows to
developing nations and to look at the ef-
fective use of those resources. The com-
mittee is also the focus of informed
debate over the importance of trade to
growth in developing countries.

Confronted in the 1970s with an in-
ternational debt crisis, the World Bank
has already accomplished much to
alleviate development problems and to
assist its borrowing members to manage
their economies.

For example, since 1980, a
remarkably short time for a multilateral
institution, the World Hank has, among
other activities:

• Initiated the structural adjustment
'" support programs in developing
countries for specific policy changes and
institutional reforms designed to achieve
a more efficienl use <<( resources;

• Increased soft project lending;

• Developed and implemented a
special action program to provide finan-
rial measures and policy advice for coun-j
tries already pursuing appropriate
policies;

• Emphasized the needs of sub-
Saharan Africa— lending to sub-Saharan
Africa was more than 30% of fiscal yean
1981-83 lending; and

• Developed and implemented the
"B" Loan, designed to increase commer-
cial bank participation in less credit-
worthy nations.

Even with these and other recent
changes, however, the Bank recognizes
more may need to be done. Despite the
fact that the current international situa-
tion is improving, recovery is only slowly
coming to the Bank's less developed
members. The Bank is concerned that
the need for internal borrower reforms
together with unpredictable external
conditions beyond the control of bor-
rowers may make debt management and
continued development of borrowers
highly tentative.

Beyond considering additional
mechanisms to assist borrowers, the
Bank is reexamining its coordination
with the IMF. Bank use of structural ad-
justment loans, increased nonproject
lending, and the longer term IMF in-
volvement with countries has blurred
the distinctions between its activities
and those of the IMF. Although there
always has been good coordination be-
tween the two institutions, their chang-
ing roles underline a need for
strengthening Bank-Fund coordination.
The Bank is working to meet these
challenges. Specifically, it is now con-
ducting a review of its current activities,
their effectiveness, and possible future
actions. Management plans, I under-
stand, to present a coherent plan of ac-
tion on the future role of the Bank in
the spring of 1985. With the Bank's
history, I believe we can confidently ex-
pect the Bank will continue to meet the
challenges presented by a dynamic world
economy.

Conclusion

We are here celebrating the achievement
of the drafters of the pathbreaking Bret-
ton Woods agreements, which have con-
stituted an essential foundation for
postwar economic cooperation. I have
reviewed some of the major ac-
complishments of these institutions,
which have been indispensable for the
enormous economic gains we have
achieved in the past four decades. I have
also mentioned some of the ways in

Department of State Bulletin

IUROPE

lich these institutions are moving to
set the critical challenges of today. We
ast ensure that these institutions re-
lin as vital and effective in dealing
'. th future problems as they have been
I the past. We must also rededicate
rselves to the task of building public
pport for these institutions and their
jectives. For if they have been vital to

managing the expansion of the world
economy over the past 40 years, we can
be sure that they will be even more im-
perative in our increasingly interdepen-
dent world economy of the future. This,
more than anything else, is the tribute
we owe to the founders of Bretton
Woods. ■

.S. -Soviet Bilateral Relations

HESIDENT'S REMARKS,

JlNE 27, 19841

Is. Billington, Hamburg, Ellison, and
Jhnson thank you for bringing your
extinguished group to the White House.
\nen I heard that you would be
j'eting at the Smithsonian to discuss
tS. -Soviet exchanges, I was eager to
■ ire my thoughts with you on this
tiely and important topic.

First, I want to congratulate the
jbodrow Wilson Center and the
C rnegie Corporation of New York; cer-
t nly nothing is more worthy of our at-
t ition than finding ways to reach out
S i establish better communication with
t ■ people and the Government of the
£ viet Union.

For many months, I have encour-
£ ?d the Soviet Union to join with us in
£ najor effort to see if we could make
f )gress in these broad problem areas:
r lucing the threat and use of force in
s ving international disputes, reducing
£ namants in the world, and estab-
1 ling a better working relationship
\ ;h each other.

At the United Nations, at the
jDanese Diet, at Georgetown Universi-
t and at the Irish Parliament, I have
eolained our efforts to reduce arms,
| rticularly nuclear arms, and to
jablish a useful dialogue on regional
i ues. Let me describe to you some of
t i many efforts that we're making to
i ablish a better working relationship
ith the Soviet Union.

We've informed the Soviet Govern-
i'nt that we're prepared to initiate
J^otiations on a new exchanges agree-
J;nt, and we've completed our prepara-
I ns for these negotiations. We've
Imposed to resume preparations to
len consulates in New York and Kiev.
T?'ve taken steps to revive our
|reements for cooperation in en-

nmental protection, housing, health,

and agriculture. Activities under these
agreements have waned in recent years,
because there've been no meetings of
their joint committees to plan projects.
We've proposed that preparations begin
for such meetings in order to increase
the number of active projects.

We're in the process of renewing
several bilateral agreements that other-
wise would have expired this year. And
we've agreed to extend our fishing
agreement for 18 months, and we're
looking at possibilities to increase
cooperation under the terms of the
agreement.

We've proposed that our Agreement
to Facilitate Economic, Industrial and
Technical Cooperation be renewed for
another 10 years and that preparations
begin for a meeting of our Joint Com-
mercial Commission.

The U.S. Navy delegation held talks
last month with their Soviet counter-
parts in accord with our agreement on
avoiding incidents at sea. And we've
agreed to extend this useful agreement
for another 3 years.

We're reviewing the World Oceans
Agreement, which has been useful in
promoting joint oceanographic research,
and we'll give careful thought to renew-
ing the agreement prior to its expira-
tion. And we've made proposals in
several other areas to improve dialogue,
foster cooperation, and solve problems.

We've proposed a fair and equitable
resolution of our differences on the
maritime boundary off Alaska. We've
proposed a joint simulated space rescue
mission in which astronauts and
cosmonauts would carry out a combined
exercise in space to develop techniques
to rescue people from malfunctions in
space vehicles. And we're currently con-
ducting another round of talks on con-
sular matters, trying to improve visa
procedures and facilitate travel between
our two countries.

We've suggested discussions be-
tween the U.S. Coast Guard and the
Soviet Ministry of Merchant Marine on

search and rescue procedures to assist
citizens of all countries lost at sea. And
we've made progress in our talks on
upgrading the Hot Line, proposing dis-
cussions on potential nuclear terrorist
incidents, on establishing a joint military
communications line, and on upgrading
embassy communications in both coun-
tries. We've also suggested regular high-
level contacts between military person-
nel of our two countries.

So, as you can see, we've offered
comprehensive and sensible proposals to
improve the U.S. -Soviet dialogue and
our working relationship. And if the
Soviets decide to join us, new avenues
would open, I think, for your efforts.

It's still too early to judge the
results. A few proposals are near agree-
ment. Many others are still under
discussion, and some have been re-
jected— at least for now.

Meaningful contact with a closed
society will never be easy. And I'm as
disturbed as you are by recent reports of
new measures taken by Soviet
authorities to restrict contacts between
Soviet citizens and foreigners. These
restrictions come on top of intensified
repression of those brave Soviet citizens
who've dared to express views contrary
to those of the Soviet political elite.

The people of the Soviet Union pay
a heavy price for the actions of their
government. In fact, we all pay a price.
When the Soviet Government takes
repressive actions against its people and
attempts to seal them off from the out-
side world, their own intellectual and
cultural life suffers. At the same time,
the rest of the world is deprived of the
cultural riches of the Soviet people.
What would classical music be without a
Tchaikovsky or literature without a
Tolstoi or chemistry without a
Mendeleev.

Civilized people everywhere have a
stake in keeping contacts, communica-
tion, and creativity as broad, deep, and
free as possible. The Soviet insistence on
sealing their people off and on filtering
and controlling contacts and the flow of
information remains the central prob-
lem.

When Soviet actions threaten the
peace or violate a solemn agreement or
trample on standards fundamental to a
civilized world, we cannot and will not
be silent. To do so would betray our
deepest values. It would violate our con-
science and ultimately undermine world
stability and our ability to keep the
peace. We must have ways short of
military threats that make it absolutely
clear that Soviet actions do matter and

Iptember 1984

EUROPE

that some actions inevitably affect the
quality of the relationship.

These reactions do lead to a
decrease in contacts with the people of
the Soviet Union, and this is a dilemma.
However, our quarrel is not with the
Russian people, with the Ukrainian peo-

the other proud na-
tionalities in that multinational state. So,
we must be careful in reacting to actions
bj the Soviet Government not to take
out our indignations on those not
responsible. And that's why I feel that
we should broaden opportunities for
Americans and Soviet citizens to get to
know each other better.

But our proposals to do that are not
a signal that we have forgotten
Afghanistan. We'll continue to
demonstrate our sympathy and strong
support for the Afghan people. The
United States will support their struggle
to end the Soviet occupation and to
reestablish an independent and neutral
Afghanistan.

Nor do our proposals mean that we
will ignore violations of the Helsinki
Final Act or plight of Andrei Sakharov,
Yelena Bonner, Anatoli Shcharanskiy,
Yuriy Orlov, and so many others. The
persecution of these courageous, noble
people weighs very heavily on our
hearts. It would be wrong to believe that
their treatment and their fate will not
affect our ability to increase cooperation
It will, because our conscience and that
of the American people and freedom-

loving people everywhere will have it no
other way.

I know these thoughts do not
resolve the dilemma we face. But it is a
dilemma for all of us. And I'll value your
advice.

I don't think there's anything we're
encouraging the Soviet leaders to do
that is not as much in their interest as it
is in ours. If they're as committed to
peace as they say, they should join us
and work with us. If they sincerely want
to reduce arms, there's no excuse for
refusing to talk, and if they sincerely
want to deal with us as equals, they
shouldn't try to avoid a frank discussion
of real problems.

Some say for the Soviet leaders
peace is not the real issue; rather, the
issue is the attempt to spread their
dominance by using military power as a
means of intimidation, and there is much
evidence to support this view. But it
should be clear by now that such a
strategy will not work. And once they
realize this, maybe they'll understand
they have much to gain by improving
dialogue, reducing arms, and solving
problems.

The way governments can best pro-
mote contacts among people is by not
standing in the way. Our Administration
will do all we can to stay out of the way
and to persuade the Soviet Government
to do likewise. We know this won't hap-
pen overnight, but if we're to succeed,

U.S.-Soviet Consular Agreement

DEPARTMENT STATEMENT,
AUG. 1, 1984'

On August 1, 1984, representatives of
the U.S. Embassy in Moscow and the
Consular Division of the Soviet Ministry
of Foreign Affairs exchanged diplomatic
notes concluding the latest round of the

nsular review talks. The
agreement brings to fruition a series of
discussions on consular matters con-
ducted in L976, 1979, 1983, and 1984
and resolves a number of issues to visas
ami the functioning of the diplomatic
missions of the two countries.

The issues involved were essentially
meal ones, to be resolved on the
basis of mutual benefit. The agreement
will facilitate the travel of particip;

onal exchange programs, ex-
of certain can

' 'tis for the
travel of diplomats in the two countries

by allowing them to enter and leave
through two additional cities beyond the
three currently provided for.

The talks were proposed by us as
part of the President's effort to expand
contacts and to move forward on
bilateral issues that can be resolved to
our mutual benefit, as he mentioned in
his June 27 remarks on U.S.-Soviet ex-
changes, and it seemed to us that the
Soviet side approached them in the same
spirit.

The U.S. delegation was led by
Raymond F. Smith, officer-in-charge of
the Bilateral Relations Section of the
Department of State's Office of Soviet
Union Affairs. The Soviet delegation
was headed by Ivan Gorokhov, Deputy
Chief of the Consular Administration of
the Soviet Ministry of Foreign Affairs.

'Read to news correspondents by acting
tmenl spokesman Alan Romberg. ■

you must stay involved and get more
Americans into wider and more mean-
ingful contact with many more Soviet
citizens.

It may seem an impossible dream to
think there could be a time when
Americans and Soviet citizens of all
walks of life travel freely back and
forth, visit each other's homes, look up
friends and professional colleagues,
work together in all sorts of problems,
and, if they feel like it, sit up all night
talking about the meaning of life and the
different ways to look at the world.

In most countries of the world, peo-
ple take those contacts for granted. We
should never accept the idea that
American and Soviet citizens cannot en-
joy the same contacts and communica-
tion. I don't believe it's an impossible
dream, and I don't think you believe
that, either.

Let me just conclude by saying
thank you, and God bless you for what
you're doing.

WHITE HOUSE FACT SHEET,
JUNE 27, 19842

In his speech today to participants in th«
Smithsonian's Conference on U.S. -Soviet
Exchanges, the President refers to
several proposals we have made to
establish a better working relationship
with the Soviet Union.

New Exchanges Agreement

We have been discussing a new General
Agreement on Contacts, Exchanges anc
Cooperation and will present a draft to
the Soviets for formal negotiations in
the very near future. The previous
agreement, often referred to as the
"Cultural Agreement," lapsed in 1979. It
was one of a series of 2-year agreement
going back to 1958. Our new draft
would provide for resumption of official
support for inter alia exchanges of ma-
jor exhibits, academic, cultural, and
sports individuals and groups and reac-
tivation of film presentations. The
American team in the formal negotia-
tions will be headed by Ambassador
Arthur Hartman in Moscow.

New Consulates General

In 1974 the United States and the
Soviet Union agreed to establish new
Consulates General in Kiev and New
York City. We already have a Consulate t
General in Leningrad and the Soviets
have one in San Francisco. Following

Is
I

Department of State Bulletit

to
irsi

EUROPE

e Soviet invasion of Afghanistan in
979, the U.S. Government suspended

e agreement for new Consulates
neral. At the time of the suspension,

e had an advance team in Kiev for
early 2 years and were approximately 6

onths away from officially opening the
Consulate. The Soviets had a similar

am in New York. Both advance teams
vere withdrawn. Since that time, we
ave discussed the Consulates issue on
mmerous occasions, focusing over the
ast year on concrete steps that could be
aken to pave the way for opening these
Consulates. We have recently proposed

0 move forward and suggested we send
team to Kiev to inspect available prop-

rty.

Environmental Protection Agreement

Tie U.S.-U.S.S.R. Agreement on
Cooperation in Environmental Protec-
ion was signed at Moscow on May 23,
972, by President Nixon and Chairman
'odgorny. The agreement has been
enewed three times for 5-year periods
nd is due to expire May 23, 1987. Ac-
ivities under the agreement have in-
luded seminars, joint publications, ex-
hange visits, and joint projects in
everal topics including protecting en-
angered species, modeling of long-
ange air pollution, and earthquake
rediction. EPA Administrator William
). Ruckelshaus has assumed the U.S.
o-chairmanship of the Joint En-
ironmental Committee and will seek to
se this forum as a means to rein-
igorate the agreement. Mr.
Luckelshaus is currently representing
ie United States at the multilateral
Conference on the Environment in
lunich, where he has discussed the
greement with Soviet officials.

lousing

'he U.S.-U.S.S.R. Agreement on
Cooperation in Housing and Other Con-
duction was signed by President Nixon
nd Chairman Kosygin on June 28,
: 974, in Moscow. We decided in
: )ecember 1983 to renew the agreement
lor a third 5-year period effective June

1 8, 1984. Besides exchange visits and
eminars, the agreement has supported
Dint projects in construction techniques

la extreme climates and unusual
geological conditions, sewage treatment
In a permafrost environment, and fire
Birevention in the design of construction
I naterials. The President's decision to
•xpand the activities under the agree-
ment will lead to the convening of the
flirst Joint Housing Committee meeting

September 1984

since 1978 and to an increase in the
already extensive private sector involve-
ment in joint projects. Secretary of
Housing and Urban Development
Samuel Pierce, Jr., will lead our efforts
under this agreement.

Health

The United States and the Soviet Union
entered into cooperation in the health
area through two agreements signed in
the early 1970s: the Agreement on
Cooperation in the Medical Sciences and
Public Health (signed May 23, 1972, at
Moscow by Secretary of State Rogers
and Minister of Health Petrovsky) and
the Agreement on Cooperation in Ar-
tificial Heart Research and Development
(signed at Moscow June 28, 1974, by
Secretary of State Kissinger and
Foreign Minister Gromyko). The Health
Agreement has been extended until May
23, 1987, while the Artificial Heart
Agreement will run until June 28, 1987.
The President has directed that steps be
taken in the near future to strengthen
cooperation under these agreements
through a renewal of high-level visits,
joint committee meetings, and the initia-
tion of new projects and possibly new
agreements. The timing for such steps
has not yet been set. The agreements
have provided for joint research inter
alia on laser treatment of glaucoma,
congenital heart disease, mechanically
assisted circulation in artificial hearts,
and cancer treatment and prevention.

Agriculture

Signed at Washington June 19, 1973, by
Secretary of Agriculture Butz and
Foreign Minister Gromyko, the
Agriculture Agreement has been extend-
ed three times and will not expire until
June 19, 1988. The Department of
Agriculture will now reactivate the
agreement (which has been dormant the
past several years) through a joint com-
mittee meeting, high-level visits, and ini-
tiation of new projects. Earlier the
agreement has supported plant, animal,
and soil science research (germ plasm
studies) and exchange of grain-related
economic information. Exchange visits,
especially those involving the private
sector, had been particularly active. All
of these programs will be reinvigorated.

Fishing Agreement

In April, the United States and the
Soviet Union agreed to extend the ex-
isting fisheries agreement for 18 months
(as opposed to the two previous
12-month extensions). Final approval is
currently pending before Congress. The

Fisheries Agreement was initially signed
in November 1976. The Soviet Union
does not, however, have a directed
fishing allocation. After the Soviet inva-
sion of Afghanistan, the United States
terminated allocations to the U.S.S.R. to
fish within our 200-mile zone. (The
Soviet Union had been receiving a direct
allocation of between 400,000 and
500,000 MT a year). Soviet processing at
sea of fish caught by U.S. fisherman as
part of an existing joint venture was
allowed to continue since it benefited
U.S. fishermen. The United States is
currently reviewing the U.S.-U.S.S.R.
fishing relationship to determine
whether mutually beneficial steps can be
taken to increase cooperation.

Long-Term Cooperation Agreement

The United States has proposed to ex-
tend for 10 years the U.S.-U.S.S.R.
Agreement to Facilitate Economic, In-
dustrial and Technical Cooperation. The
agreement was signed by Presidents
Nixon and Brezhnev during the 1974
Moscow summit. It is scheduled to ex-
pire June 28, 1984. The principal provi-
sions of the agreement call upon the
parties to use their good offices to
facilitate cooperation in economic, in-
dustrial, and technical areas. In practice,
the agreement has been exclusively
economic and has facilitated certain
business dealings between the two coun-
tries. If the agreement is extended, our
exception is that there will be a meeting
of the Working Group of Experts under
Article III to examine prospects for
trade. If that meeting is successful, then
a Joint Commercial Commission meeting
will be held when practical.

U.S. -Soviet Incidents at Sea
Agreement (INCSEA)

The 1972 U.S. -Soviet Agreement on the
Prevention of Incidents at Sea estab-
lished certain "rules of the road" to
govern special situations involving naval
surface vessels and aircraft of the two
nations. It also set up agreed-upon,
navy-to-navy channels for the prompt
resolution of any problems arising under
this agreement. Senior officers of the
U.S. and Soviet Navies meet on an an-
nual basis for a general review of the
implementation of the agreement and
discussion of ways in which it might be
strengthened. The most recent review
took place in Moscow in late May. At
that time, the U.S. and Soviet sides
agreed to a renewal of the INCSEA
agreement for another 3 years.

EUROPE

World Oceans Agreement

R. World Oceans Agree-
i L973 and renewed
in 1981. It has been useful in
• i ing joint oceanographic research
and has in minars, exchange

visits, and joint ocean research cruises.
National Oceanic ami Atmospheric Ad-
ministration has taken the U.S. lead on
this agreement. The agreement comes
up for renewal in December.

Maritime Boundary

The United States and the Soviet Union
have a difference relating to the precise

igraphic depiction and location of
the boundary line established by the
1867 convention ceding Alaska. The dif-
ference relates to the fact that the
United States depicts the 1867 conven-
tion line as the maritime boundary by
arcs of great circles, while the Soviet
Union depicts the convention line by
rhumb lines. We have proposed a fair
and equitable resolution to the issue.
Three rounds of technical level discus-
sions have been held and a fourth round
is expected soon.

Space Rescue Mission

The U.S. proposal envisages cooperation
between NASA and Soviet space of-
ficials on a joint simulated space rescue
mission. A space shuttle would rendez-
vous with the Soviet space station to
practice procedures that might be
necessary to rescue each other's person-
nel. Details of the proposal would have
to be worked out.

Consular Review Talks

The session of U.S. -Soviet consular
review talks currently underway in
Moscow is the latest round of a series of
discussions which began in 1976, when
representatives of the United States and
the Soviet Union met to attempt to
resolve a number of consular issues
outstanding between the two countries.
Those issues primarily involved visa
questions and administrative matters
relating to the functioning of our
diplomatic missions. The discussions

ice in Mosc< 176 and

in Washington in 1979 and 1983.

Search and Rescue Talks

In October L981, the U.S l oa I Guard

was authorized to take the initiatn

direct lines of emergency com-
munications with the Soviet, man

rescue authorities in the Pacific. As a
result of subsequent exchanges in June
agreement was reached to hold a
working-level meeting on a broad range
of search and rescue topics. This
meeting was scheduled for early
December 1983, but was postponed at
the request of the Soviet side. We have
proposed rescheduling this meeting.

U.S. -Soviet Communications
Improvements Talks

On the basis of the President's proposals
of May 1983, a U.S. team has met with
Soviet counterparts three times to
discuss possible means by which
U.S. -Soviet communications — for use in
both times of crisis and calm— might be
strengthened. The most recent meeting
was in Moscow in late April. On the
basis of those talks, significant progress
has been made in working out agree-
ment with the Soviets on the desirability
of upgrading the existing direct com-
munications link (the Hot Line) with
secure facsimile transmission
capabilities, which would increase the
speed, reliability, and versatility of that
system. We expect another meeting
shortly. Additionally, the United States
has put forward proposals to upgrade
the communications capabilities of the
U.S. and Soviet Embassies in each
other's countries, to establish a joint
military communications link to handle
the exchange of time-sensitive technical
data, and to facilitate consultations in
the event of a nuclear terrorist threat or
incident.

U.S.-Soviet Military Contact

With the exception of the special navy-
to-navy talks under the 1972 INCSEA
agreement, there has been no channel
for high-level military exchange between
the United States and Soviet Union out-
side of specifically arms control-related
talks since the one-time meeting of the
Secretary of Defense and Chairman of
the Joint Chiefs of Staff with their
Soviet counterparts during the 1979
Vienna summit. Earlier this year, the
President suggested to the Soviet
leadership the desirability of exploring
the possibility of regularizing some form
of contact and discussion between those
responsible for defense matters on both
sides for the purpose of increasing
mutual understanding and minimizing
the potential for misinterpretation and
miscalculation.

Human Rights Cases

Andrei Sakharov. Dr. Andrei Sakharov,
a physicist and Academy of Sciences
member who played a major role in the
development of the Soviet hydrogen
bomb, has spoken out at length in
defense of human rights in the Soviet
Union. In 1975 he was awarded the
Nobel Peace Prize for those efforts.
Since 1980 he has been required to live
in internal exile in the closed city of
Gorky. In early May he began a hunger
strike to obtain permission for his wife,
Yelena Bonner, to travel abroad for
necessary medical treatment; there has
been no confirmed information of any
sort on his health or his status since that
time.

Yelena Bonner. A doctor by train-
ing, Yelena Bonner is the wife of Dr.
Sakharov and was a founding member
of the Moscow Helsinki Group. She has
served as his main channel of com-
munications to the outside world during
his exile in Gorky. She is also believed to
have begun a hunger strike in early May
to obtain permission to travel abroad for
vital medical treatment; she suffers
from both a heart condition and serious
eye problems.

Yuriy Orlov. A founder and leader
of the Moscow Helsinki Group, Yuriy
Orlov was long active on behalf of
human rights in the Soviet Union. He
was a founding member of the Moscow
chapter of Amnesty International and a
participant is unofficial scientific
seminars organized for refusenik scien-
tists. He was arrested in February 1977
and convicted in May 1978 of "anti-
Soviet agitation and propaganda."
Earlier this year he completed 7 years in
a strict-regime labor camp and began 5
years of internal exile.

Anatoliy Shcharanskiy. Anatoliy
Shcharanskiy is a long-time activist on
behalf of human rights and Jewish
culture in the Soviet Union. A founding
member of the Moscow Helsinki Group,
Shcharanskiy was also a leader of the
Jewish emigration movement and a
liaison between Western newsmen and
Soviet dissidents. In March 1977 he was
arrested and in July 1978 was convicted
of "anti-Soviet agitation and
propaganda" and "treason." He is cur-
rently in Chistopol Prison; his wife,
Avital, lives in Israel.

'Made in the East Room at the White
House to participants in the Smithsonian In-
stitution's Conference on U.S.-Soviet Ex-
changes (text from Weekly Compilation of
Presidential Documents of July 2, 1984).

2Text from White House press release. I

Department of State Bulletin

EUROPE

J. S. -Soviet Union Expand
'Hot Line" Agreement

RESIDENTS STATEMENT,
ULY 17, 19841

am happy to be able to announce today
lat we and the Soviet Union have
jached agreement to expand and im-
rove the operation of the direct com-
mnications link, or the "Hot Line."

This agreement is a modest but
Dsitive step toward enhancing interna-
onal stability and reducing the risk
lat accident, miscalculation, or
dsinterpretation could lead to confron-
ition or conflict between the United
tates and the Soviet Union.

With the addition of a facsimile
ipability, we will not only be able to ex-
lange messages faster, but for the first
me we will be able to send graphic
aterial such as maps or pictures which
ould play a crucial role in helping to
■solve certain types of crises or
isunderstandings.

The negotiations which led to this
jreement began about 1 year ago
mgust 1983), based upon a series of
oposals that we first made in May
*83.

In developing this and other ini-
itives designed to reduce the risk of
ar due to accident, misunderstandings,
• miscalculation, we had the benefit of
xellent advice from a number of key
ingressional leaders, including
enators Warner and Nunn and the late
mator Jackson.

I see this agreement as both an ap-
•opriate technical improvement to the
lot Line," which has served both our
ivernments well for over 20 years, and
: a good example of how we can, work-
g together, find approaches which can
ove us toward a reduction in the risks
' war.

HITE HOUSE FACT SHEET,

ULY 17, 19841

lie United States and the Soviet Union
I day formally agreed to add a facsimile
j ansmission capability to the direct
Jimmunications link (DCL), commonly
Jiown as the "Hot Line." This step— the
f 'eond major technical improvement to
lie "Hot Line" since it was established
I 1963— will enhance the capability of
lie system and thus its potential to help
• ''solve crises and avert misunderstand-

The agreement was initiated at the
State Department this morning by Act-
ing Secretary of State Kenneth W. Dam
and Soviet Charge Victor F. Isakov.
Chairman of the U.S. delegation in the
talks on communications improvements
was Mr. Warren Zimmerman of the
State Department, who was until recent-
ly Deputy Chief of Mission of our Em-
bassy in Moscow. The Deputy Chairman
for the United States was Mr. Stuart
Branch who has been Deputy Assistant
Secretary of State for Communications.
The U.S. delegation included other of-
ficials of the State Department, the
Defense Department, and the National
Security Council staff. The Soviet
delegation was headed by Mr. A. M.
Varbanskiy, a Chief of Administration in
the U.S.S.R. Ministry of Communica-
tions. Other members of the delegation
included officials of the Communications
Ministry and the Foreign Ministry.

The addition of facsimile transmis-
sion capability to the "Hot Line" will
enable the U.S. and Soviet heads of
government to exchange messages far
more rapidly than they can with the ex-
isting teletype system. In addition, they
will be able for the first time to send
graphic material over the DCL. The
precise, detailed, and often easily inter-
preted information offered by such
graphic material as maps, charts, and
drawings could be essential to help
resolve a crisis or misunderstanding.

Prior Negotiating History

In June 1963, the United States and the
Soviet Union agreed in a memorandum
of understanding to establish a direct
communications link for use in time of
emergency. Each agreed to ensure
prompt delivery to its head of govern-
ment of any communications received
over the DCL from the other head of
government. The memorandum of
understanding was negotiated and sign-
ed by the heads of the U.S. and Soviet
delegations to the 18-nation Disarma-
ment Conference in Geneva. The DCL
was activated in August 1963.

Eight years later, the DCL was up-
dated by a September 30, 1971, agree-
ment negotiated by a special working
group of the two SALT [strategic arms
limitation talks] delegations and signed
by the U.S. Secretary of State and the
Soviet Foreign Minister. This agreement
provided for the addition of two satellite

circuits to the DCL, one using the Soviet
Molniya II satellite system and the other
the U.S. INTELSAT system. Those two
circuits became operational in January
1978.

A second special working group of
the two SALT delegations simultaneous-
ly negotiated a related Agreement on
Measures to Reduce the Risk of Out-
break of Nuclear War between the
United States and the U.S.S.R., which
was signed on the same day, September
30, 1971. This agreement provided for
each party to notify the other in advance
of any planned missile launch extending
beyond its national territory in the direc-
tion of the other and for each to notify
the other immediately in the event of
certain situations which could create a
risk of nuclear war. The parties agreed
that they would use the DCL to transmit
urgent information in situations requir-
ing prompt clarification.

The Reagan Proposals

In May 1983, President Reagan pro-
posed to the Soviet Union three
measures to improve the bilateral com-
munications network between the two
countries: the addition of a high-speed
facsimile capability to the "Hot Line;"
the establishment of a joint military
communications link (JMCL); and the
establishment of high-speed data links
between each government and its Em-
bassy in the other's capital.

The Secretary of Defense had
recommended those proposals to the
President following a full and complete
study of possible initiatives for enhanc-
ing international stability and reducing
the risk of nuclear war. That examina-
tion, which involved all concerned U.S.
Government agencies, was mandated by
the Congress in the Department of
Defense Authorization Act of 1983. The
Secretary of Defense transmitted its
results and recommendations in his
April 1983 Report to the Congress on
Direct Communications Links and Other
Measures to Enhance Stability.

U.S. -Soviet negotiations on improv-
ing bilateral communications links
opened in Moscow in August 1983. Sub-
sequent rounds have been held in
Washington in January 1984, in Moscow
in April 1984, and the one just com-
pleted in Washington in July 1984.
Those discussions have now resulted in a
U.S. -Soviet accord to add a facsimile
transmission capability to the direct
communications link.

eptember 1984

FOOD

DCL System

The direct communications link will now
consist of:

• Three circuits (two satellite cir-
cuits plus one wire telegraph circuit |;

• One Earth station in each country
for each satellite circuit; and

• Terminals in each country linked
to the three circuits and equipped with
teletype and facsimile equipment.

In keeping with the principle of con-
fidentiality concerning communications
between heads of government, the
precise number of times that the heads
of state have used the system has not
been discovered. We do know that it has
proved invaluable in major crises. U.S.
Presidents have cited its use during the
1967 and 1973 Arab-Israeli wars.

■Text from White House press release.

19th Report on Cyprus

MESSAGE TO THE CONGRESS,
JULY 9, 19841

In accordance with Public Law 95-384, I am
submitting herewith a bimonthly report on
progress toward a negotiated settlement of
the Cyprus question.

Since my last report to you there have
been several developments in the Cyprus

'ii worthy of note. On April 17 the self-
declared Turkish Cypriot "state" announced
the formal exchange of ambassadors with the
Government of Turkey. We strongly opposed
this development and declared publicly our
concern that it could set back the U.N.
Secretary General's efforts in the search for
progress. We also repeated our opposition to
any diplomatic recognition of the self-
declared entity.

On May 8 I informed the Congress that
the Administration intended to request
authorization for a "Cyprus Peace and

i ruction Fund" of up to $250 million to
be utilized on Cyprus at such time as a fair
and equitable solution acceptable to both
Cypriot communities is reached, or when
substantial progress is made toward that
goal. I intend this commitment to be a sym-
bol of the shared concern of the Administra-
tion and the Congress for promoting genuine
progress on Cyprus. I was pleased that a
committee of the House of Representatives
has included this fund in an authorization bill
it is considering.

i Mi May 11 the United Nations Security
lut ion 5 i0 which con-
demned the Turkish Cypriot community for

en. We found it
necessary to abstain on the resolution, believ-
ing its language unlikely to contribute to the
goal of a i i ment. We

i il our continuii p

n to the Turkish i

d our determina-
tion to see progress made under the a

neral. Following |
that resolution Se.re':;.v Shultz's Special

Cyprus Coordinator, Richard Haass, and
other Administration officials undertook in-
tensive consultations with both Cypriot par-
ties, with U.N. officials and others on the
potential for progress on the question.

On June 15 the Security Council met
again on Cyprus, this time to renew,
unanimously, its mandate for U.N.
peacekeeping forces in Cyprus (UNFICYP).
The resolution approved on that date is iden-
tical in text to the previous renewal in
December, 1983. Following the vote the
Turkish Cypriot representative told the Coun-
cil his community could not accept the resolu-
tion but would continue its cooperation with
the U.N. forces on the same basis as that an-
nounced by the Turkish Cypriots in
December, 1983. We view this continuation
of the vital U.N. peacekeeping mandate as a
positive sign that the parties to the Cyprus
question do intend to continue the search for
a solution. I am enclosing a copy of the
Secretary General's report to the Council on
UNFICYP activities.

At the time of the June Security Council
vote the Turkish Cypriot side pledged to
maintain the unoccupied status of the city of
Varosha and presented to the Secretary
General its latest ideas on possible next steps
toward a solution. We welcomed the Varosha
announcement and hope the ideas presented,
as well as the comprehensive framework
presented previously by the Government of
Cyprus, can assist the Secretary General as
he resumes efforts under his good offices
mandate.

Sincerely,

Ronald Reagan

'Identical letters addressed to Thomas P.
< I'Neill, Jr.. Speaker of the House of

Representatives, and Charles H. Percy, chair-
man of the Senate Foreign Relations Com-
mittee (text from Weekly Compilation of
1 'resilient ial Documents of July 16, 1984). ■

Food for Peace
Day, 1984

PRESIDENT'S REMARKS,
JULY 10, 19841

Thirty years ago today — and you've
probably been told this several
times — President Dwight D. Eisenhower
signed into law Public Law 480, the
Food for Peace program. And 10 years
before the signing ceremony which took
place here at the White House, Presi-
dent Eisenhower launched the Norman-
dy invasion. And only the year before
the signing ceremony, he was first
sworn in as President. It's possible that
on July 10, 1954, Ike thought most of
his great moments were behind him. But
that was not so, as this program proves,
for in time it grew to become one of the
greatest humanitarian acts ever per-
formed by one nation for the needy of
other nations.

I'm delighted to welcome here today
Ike's Secretary of Agriculture, Ezra
Taft Benson, who was present when the
Food for Peace bill was signed.
Welcome. Glad to have you here.

Food for Peace is still the largest
food aid program in the world. Over the
last 30 years, it's delivered almost 653
billion pounds of food to people in over
100 countries. It's helped bring hope and
new economic opportunity to more than
1.8 billion people. Statistics are, by their
nature, dry, but bear with me for a mo-
ment as I give you just a few more —
with the hope that they haven't been
given to you already.

Food for peace has delivered 27,000
tons of food a day to recipient countries
for three decades now. And the value of
those U.S. farm products exceeds $33
billion — more than $3 million a day over
the history of the program.

All of those numbers give us a sense
of the scope and the magnitude of this
program. But its great contribution is
that it's an instrument of American com-
passion. And it also reflects America's
practicality. We recognized 30 years ago
that people who are hungry are weak
allies for freedom. And we recognized,
too, that except in emergencies, hand-
outs don't help. From the beginning,
recipient countries paid for a significant
part of the food they received.

The businesslike approach is one of .
the strengths of this program. We've
never attempted to make countries

Department of State Bulletin

' lich receive our food become depend-
t on our aid. In fact, we've used our
j 1 to foster economic development
I ound the world. And that is an impor-
nt reason why, over the years, many
the nations that have received our aid
ve eventually become major commer-
il partners.

In the early days of Food for Peace,
e major recipient nations were the
ir-devastated economies of Europe:
ily and Spain, West Germany and
pan. And with time and with the help
Food for Peace, those economies
gained their strength. They began to
j y cash for American farm com-
idities. Many of these countries have
come our top commercial partners.
Jght of our top 10 agricultural markets
ie former recipients of Food for Peace
ii. And Japan is now our number one
aricultural market on a cash basis. And
t it has not only been good for the
znerican farmer and the American
e )nomy; it's been good for our interna-
ls nal relations.

Food for Peace has been very impor-
lit in spreading good will and generosi-
t throughout the world. When droughts
E d flooding from the El Nino weather
c ;turbances destroyed food crops in
] ru, Bolivia, and other Latin American
c entries last year. Food for Peace took
t ? lead in providing emergency relief.
I iring the 1966 famine in India,
l -ighly 60 million people are estimated
1 have been sustained for 2 years by
] >od for Peace shipments.

Today we face a severe and wide-
i read famine in Africa, which is
i -eatening the lives of millions. And,

< ce again, Food for Peace is saving

1 es. We've already agreed to provide

< er $400 million for food assistance for
I rica in this year alone. And I want to

j nounce today a major initiative to help
i i starving people of Africa and the
i >rld. It's a new program to help us
t liver food more quickly and smoothly
1 those who suffer the most from the
I vages of famine.

I will shortly propose legislation to
c ?ate a $50 million Presidential fund
I owing us to set aside existing foreign
i 1 resources to meet emergency food
|l needs. By prepositioning food stocks
jerseas where the requirements are the
jeatest, we can respond to emergency
j uations more rapidly and effectively. I
i 11 also propose authority to allow the
(iiod for Peace program to reduce the
rden of transportation costs on the

most needy countries. And all this is
aimed at reducing the loss of life to
acute hunger in the Third World.

Food for Peace has come to embody
the spirit of American voluntarism. The
Federal Government has developed a
strong partnership with the private sec-
tor to help feed malnourished infants
and children, to help mothers and the
aged and the disabled. This cooperative
effort with private and voluntary
organizations includes such agencies as
CARE and Catholic Relief Services, and
many qther groups are helping also.

In short, the Food for Peace pro-
gram has become a wonderful means by
which a nation of abundance has helped
those in need. It's helped us expand
agricultural markets, get needy allies
back on their feet, and help potential
allies become strong allies for freedom.
Food for Peace has helped to coordinate
the charitable impulses of the private
sector. It's helped feed the weakest peo-
ple in the world.

And this record of progress is the
result of what happened 30 years ago to-
day, when Dwight Eisenhower picked up
a pen and signed a piece of paper that
quietly— and, with no great attention
from the wise, he changed the world. I
think Dwight D. Eisenhower would be
very proud of what the Food for Peace
program has accomplished. I certainly
am, and I'm proud to be able to mark
with you its anniversary today.

May Food for Peace continue its
great work; may it continue to be ad-
ministered wisely; and may we continue
to combat hunger and malnutrition
throughout the world.

I thank you all again for being here,
and God bless you.

And, now, I'll sign this proclamation
which designates today, July 10, 1984,
as Food for Peace Day.

FOOD

PROCLAMATION 5220,
JULY 10, 19842

July 10, 1984, is the thirtieth anniversary of
the signing of the Agricultural Trade
Development and Assistance Act of 1954
(Public Law 480). This legislation, signed by
President Eisenhower, began the largest food
assistance program ever undertaken by one
country on behalf of needy people throughout
the world, the Food for Peace program.

The productivity and abundance of U.S.
agriculture have made this generosity possi-
ble. During the thirty years of this program,
more than 300 million tons of agricultural
commodities and products valued at approx-
imately $34 billion have been distributed to
over 150 countries. This food has helped
reduce world hunger and improve nutritional
standards.

The Food for Peace program has served
as an example for other countries which have
joined the United States in the effort to pro-
vide food aid to needy people. It has served
as a model for others to follow and continue
to meet changing needs and situations.

The Food for Peace program has ac-
complished multiple objectives to combat
hunger and malnutrition abroad, to expand
export markets for U.S. agriculture to en-
courage economic advancement in developing
countries, and to promote in other ways the
foreign policy of the United States.

In recognition of the accomplishments of
this program, the Congress, by Senate Joint
Resolution 306, has designated July 10, 1984
as "Food for Peace Day" and has authorized
and requested the President to issue a proc-
lamation in observance of that day.

Now. Therefore, I, Ronald Reagan,
President of the United States of America,
do hereby proclaim July 10, 1984, as Food
for Peace Day, and I call upon the people of
the United States to commemorate this occa-
sion with appropriate ceremonies and ac-
tivities.

In Witness Whereof, I have hereunto set
my hand this 10th day of July, in the year of
our Lord nineteen hundred and eighty-four,
and of the Independence of the United States
of America the two hundred and ninth.

Ronald Reagan

'Made at the signing ceremony in the
East Room of the White House (text from
Weekly Compilation of Presidential
Documents of July 16, 1984).

2Text from Weekly Compilation of
Presidential Documents of July 16. ■

iptember 1984

HUMAN RIGHTS

Extending Voluntary Departure
for El Salvadorans

by Elliott Abrams

.'In Siihi-tininiiltii

Rvhsofttu Houst Committee on
Rules "n Jin,, \!r. Abrams is

Assistant S< i r< taryfor Human Rights
and Humanitarian Affairs.1

I am grateful for this opportunity to ap-
ii before you today. As every member
of the subcommittee knows, and indeed
as every American must by now be well
aware, El Salvador is a country troubled
by poverty, violence, overpopulation,
and a history of oppression. For a
number of years, Salvadorans have
looked for economic opportunity
elsewhere. Prior to the war between El
Salvador and Honduras in 1969, a large
number were living in Honduras.
Through the 1970s and early 1980s, hun-
dreds of thousands of Salvadorans have
come to the United States. The in-
creased violence in El Salvador
prevalent since 1980 no doubt increased
the incentives to leave the country, as
have the economic difficulties which the
war has only worsened.

The United States is thus confronted
with a number of significant immigra-
tion issues regarding El Salvador. It is
difficult for Salvadorans to get visitors'
visas to the United States and difficult
for them to get immigrant visas as well.
We face a very significant amount of il-
legal immigration from El Salvador, and
a large quantity of asylum applications.
How do we deal with the asylum appliea
tions? To those not entitled to asylum,
how do we respond to their desire to live
in the United Slates?

Asylum Policies

The asylum issue is in a sense an easy

.S. law, in incorporating the
definition of a refugee contained in the

i Protocol Relating to the
Status of Refugi forth the stand

; an asylum application
We apply these stand
iid a limited number of aliens, ir-
respective of their nationality,
them. This is true of asylum applicants
from HI Salvador. This I
much criticism of the Admiiiistra!
asylum policy toward Id Salvador, but in
e no "asylum policy" toward
other countrj ; we
ndards to each. In the
nendations for

the approval of applications from
Salvadorans and Nicaraguans have been
running at roughly the same rate; and
though, of course, there are variations
for both countries, about 10% of applica-
tions can meet legal standards. This
reflects no policy decision, nor does it
reflect the state of our bilateral relations
with either government; it simply re-
flects the fact that asylum applicants
must meet the legal standards in order
to be granted asylum. We are well
aware that much criticism could be end-
ed were the number of Salvadoran
asylum applications that are approved
higher. But, to approve asylum applica-
tions for partisan political reasons would
ignore the law. We recommend in favor
of applications that meet the standards
and against those that do not.

Deportation Considerations

The argument is then made that all
Salvadorans, even those who do not
qualify for asylum, should not be
deported to El Salvador but rather
allowed to remain here. As you know,
the Administration does not concur with
this view. All suspension of deportation
decisions require a balancing of
judgments about their foreign policy,
humanitarian, and immigration policy
implications.

In the case of El Salvador, the im-
migration policy implications of suspen-
sion of deportation are enormous. Here
we have a country with a history of
large-scale illegal immigration to the
United States. Can anyone doubt that a
suspension of deportation would increase
the amount of illegal immigration from
El Salvador to the United States? An in-
telligent and industrious Salvadoran
weighing a decision to try illegal im-
migration to the United States knows
that one of the risks is deportation,
which might occur before he has had a
chance to earn back the costs of the
journey. If we remove that possibility of
deportation, it is simple logic to suggest
that illegal entry becomes a more attrac-
tive investment.

Of course, not all Salvadoran
migrants to the United States are solely
or primarily economic migrants; some
are refugees who may be and have been
granted asylum, and they do not need
suspension of deportation to be pro-

tected. So, by definition, when we
discuss suspension of deportation for the
group which is not eligible for asylum,
what we are discussing is whether peo-
ple who emigrate from El Salvador to |
the United States illegally should be per-
mitted to reside here. If one says yes toj
this question then we do not have an inl
migration policy with regard to El
Salvador. We have abdicated the respon-
sibility to have one.

It was the failure of our government
to have a coherent approach to refugee
flows that prompted the Congress to
pass the Refugee Act of 1980. It was the
specific intent of the Congress to end
nationality-specific measures that pro- j
vided benefits for persons from one
country and left other persons with
similar claims in limbo. It was also the
Refugee Act that made part of our law
the UN High Commissioner's definition
of refugee that requires each asylum ap-
plication to be examined on an individua
basis.

We believe our government should
avoid single nationality legislation. We
also believe passage of immigration
reform legislation provides long-term
solutions to some of our immigration
problems. Many Salvadorans, as well as
persons of other nationalities, will be
permitted to achieve legal resident
status through provisions of the
amnesty.

Some groups argue that illegal
aliens who are sent back to El Salvador
meet persecution and often death. Ob-
viously, we do not believe these claims
or we would not deport these people.
Twice, in recent years, the U.S. Em-
bassy in San Salvador has tracked
deportees to determine if they were be-
ing persecuted; we concluded that they
were not. Last year we asked some of-
ficials of Tutela Legal, which is the
human rights office of the Archdiocese
of El Salvador, whether they believed
there was a pattern of persecution of
deportees. They replied that they did
not. It is noteworthy that these accusa-
tions, which are lodged by some
American activist groups critical of U.8
policy in El Salvador, find no echo nor
did they find their source in complaints g
from Salvadoran human rights groups, ;|
which have never made this claim. And
that stands to reason. El Salvador is a
country, as noted above, in which
emigration abroad is a common and
respected means of self-improvement,
and it is engaged in by hundreds and
thousands of Salvadorans, by perhaps a
quarter of the population. I submit that
the notion that the people being
deported are easily identifiable when

k
ei
k
1;
Ki
oar

■■
'-

Department of State Bulletin:'

HUMAN RIGHTS

t ey return to El Salvador is false, and
' e notion that they are automatically
| spect is equally false.

The subcommittee will be interested
learn that, in part, in response to the
at interest expressed by Chairman
omano L.] Mazzoli, Senator [Alan K.]
Tipson, and others, we have continued
study the treatment of deportees. The
Jnbassy in San Salvador was sent the
mes of nearly 500 deportees, selected
random. Efforts were made to con-
;t every one of them in order to see
lat happened to them after their
;urn. We have been able to locate or
d out about roughly 50% of them, us-
; Salvadoran employees so as to draw
little attention as possible to this
lole survey.
We have now completed the study
ad we will be happy to share the
S?cific information gathered as soon as
J' final report is ready for release. I
ti tell you, though, that we found no
a dence of mistreatment of those
Slvadorans interviewed, or among
6 >se whose welfare was verified
t 'ough contact with family members or
I ?nds. One interesting note is that 21%
c those who were located are, according
fi family or friends, already back in the
t ited States.

We have confirmed that one
r urnee was killed. His wife reports
t it the guerrillas killed him for his
€ -Her involvement with government
s 'urity forces. A letter sent to the ad-
t ;ss furnished by a second person was
r urned marked "deceased." The Em-
k jsy was unable to obtain any further
i: ormation.

I would not suggest to this subcom-
r :tee that we have completed here the
c 'initive scientific study and that no
f 'ther efforts are needed. But surely
t ;re must come a time when any
c server concludes that this alleged pat-
t n of wide-scale abuse of deportees is
D supported by evidence.

1 imanitarian Assistance

l.m sometimes asked why the United
jites does not do anything to solve the
t manitarian problem of poverty and
I placed persons and violence in El
llvador. This is a startling question,
lien you consider the enormous amount
i American diplomatic and political ef-
J't aimed at bringing democracy and
lace to El Salvador, and the extraor-
Siary amounts of economic aid which
J' give and increased amounts which

3 Administration has urged upon

ingress.

Our proposal of $341 million in
economic assistance for FY 1985 to El
Salvador is certainly a valuable response
to the humanitarian problem there. I do
not believe that the appropriate
response to the problems of poverty or
violence in El Salvador is to allow any
Salvadoran who wishes to simply live in
America instead — any more than I think
this is true for Guatemala, Haiti,
Nicaragua, Sri Lanka, Afghanistan,
Iran, Uganda, Ethiopia, Lebanon, Viet-
nam, or Zimbabwe. My point, of course,
is that in a very large number of cpun-
tries millions of people, and indeed, tens
of millions, face lives which any
American can only view as desperate.
How do we respond? We respond with
our willingness to allow hundreds of
thousands to legally immigrate to the
United States. We respond with our
asylum and refugee programs, which are
the most generous in the world. We re-
spond with our foreign aid program,
now totaling $8.89 billion including the

pending supplemental request. And we
respond with various political and
diplomatic efforts to resolve disputes
and reduce violence. It does not seem to
me that a sensible response can be to
say that all these people, if they can
make it to the United States, can stay.
We can and we must do very many
things to address the urgent and
desperate humanitarian needs of tens of
millions of people throughout the world,
but one thing we really cannot do for
them all is tell them to move to
America.

I therefore respectfully suggest that
the current policy is an appropriate one,
combining large amounts of economic
assistance, energetic diplomatic efforts,
and the grant of asylum to those with a
well-founded fear of persecution.

'The completed transcript of the hearings
will be published by the committee and will
be available from the Superintendent of
Documents, U.S. Government Printing Of-
fice, Washington, D.C. 20402. ■

Persecution and Restrictions
of Religion in Nicaragua

by Elliott Abrams

Address before the United Jewish Ap-
peal on June 28, 1984. Mr. Abrams is
Assistant Secretary for Human Rights
and Humanitarian Affairs.

As I am sure everyone here knows, on
July 20, 1983, President Reagan drew
attention to the plight of the tiny Jewish
community of Nicaragua at a White
House conference. "Virtually the entire
Jewish community of Nicaragua has
been frightened into exile," the Presi-
dent declared. "Their synagogue, which
had its doors torched by Sandinista sup-
porters in 1978, has since been con-
fiscated and turned into offices of a San-
dinista organization."

Needless to say, the President's
remarks provoked a firestorm of con-
troversy. The Nicaraguan Government
and its apologists in this country, and
some Americans who should know bet-
ter, indignantly denied that the San-
dinistas were anti-Semitic. Some of the
President's critics even accused him of
fabricating anti-Semitic allegations in
order to win support for U.S. policy in
Central America. For this reason, I am

very pleased to have been asked to
speak to you this afternoon on the
Jewish community in Nicaragua.

Overall Religious Conditions

Before turning to the fate of Nicaraguan
Jewry, however, I want to spend just a
few moments discussing freedom of
religion in general in Nicaragua. My
reason for doing so should be obvious. If
it were the case, for example, that the
Government of Nicaragua scrupulously
respects the rights of Catholics, of Prot-
estants, and of Indians, then even if
there were well-documented incidents of
anti-Semitism in Nicaragua, I think
many of us would be inclined to give the
Sandinistas the benefit of the doubt and
to attribute such incidents to vicious and
misguided individuals, rather than to the
government. On the other hand, if it
turned out that virtually all non-Jewish
religious groups in Nicaragua were be-
ing persecuted, then it would stand to
reason that the Jewish community would
also be subjected to persecution. To
believe otherwise would be to argue, in
effect, that the Sandinistas are philo-
Semitic, and no one, not even the San-
dinistas, have made that particular argu-
ment.

Ilptember 1984

HUMAN RIGHTS

What, then, is the overall situation
with regard to freedom of religion in
Nicaragua? As I am sure all of you
know, about 85% of the Nicaraguan
population is Catholic. If you have been
following the situation in Nicaragua you
also know that the Sandinista regime
and the Catholic Church are lucked in a
bitter struggle. You are probably aware
that the Sandinista government has
openly challenged the influence of the
Catholic Bishops of Nicaragua, especially
thai of Archbishop Obando y Bravo. You
know that the regime has denied the
Archbishop of the Roman Catholic
Church the traditional opportunity to
broadcast the Mass on television during
Holy Week and has openly insulted the
Pope. You know that government-
organized mobs have interrupted
Masses, harassed churchgoers, threat-
ened priests, and physically attacked
members of the clergy. You know that
100,000 Nicaraguan Catholics attended a
rally on Good Friday this year to
demonstrate their support for the
church and their hostility to the regime.
And you know that in a homily to some
4,000 Nicaraguans several weeks ago,
the head of the Nicaraguan Bishops'
Conference, Bishop Pablo Antonia Vega,
said. "The tragedy of the Nicaraguan
people is that we are living with a
totalitarian ideology that no one wants
in this country."

Because of the great strength of the
Catholic Church in Nicaragua, the San-
dinista strategy has been to infiltrate,
cen or, and control it, rather than to
'■radicate it outright. The Sandinistas
have actually launched a two-pronged at-
tack on the Catholic Church as an in-
stitution. On the one hand, they have
taken a series of steps aimed at silenc-
ing and undermining the episcopal
hierachy of the church in Nicaragua.
Simultaneously, they have supported the
formation of a rival "popular" or
"people's" church subservient to the

me.

In response, Nicaragua's Archbishop
< Ibando has condemned "those who are
ivide the church" and spread
the idea that there is "one bourgeois

church and another church for the | r."

Vatican has become so alarmed at

iitr, ,ipt of the Sandinistas to divide
hurch in Nicaragua thai the Pope

ied a Pastoral letter on .lune 29,
which criticized advocates of the
"popular church." Despite that fad, the
Sandinistas and their supporters ii
church continue to portray the official
church hierachy as "bourgeois" and "op-
pressors," attempt h irize the

faithful and create, in effect, a new
church controlled by the regime.

If the Sandinistas have been forced
to adopt a somewhat indirect approach
in their efforts to undermine the power-
ful Catholic Church in Nicaragua, they
have been under no similar inhibitions in
dealing with the far less powerful
Nicaraguan Protestant churches. Among
the Protestant groups harassed by the
Sandinistas are the Seventh-day Adven-
tists, the Mennonites, Jehovah's
Witnesses, the Church of Jesus Christ of
Latter-day Saints, and the Moravian
Church. By August 1982 more than 20
Managua Protestant churches had been
seized by Sandinista-led mobs. Some,
but not all, of the confiscated properties
were returned, but only on condition
that the ministers refrain from criticiz-
ing the government. In addition, the
Salvation Army was forced out of
Nicaragua in August 1980, after
ominous verbal threats from authorities,
and, finally, instructions to close up the
program and leave the country.

Perhaps the most tragic case of
government persecution in Nicaragua,
however, is that inflicted on the Miskito,
Sumo, and Rama Indians of Nicaragua's
isolated Atlantic coast. Most of the
members of these tribes are members of
minority Protestant churches, especially
the Moravian Church. Living in isolation
from most of Nicaragua, they have had
little to do with any government. The
Moravian missionaries filled the gap by
providing most of the schools, hospitals,
and support organizations that main-
tained the area.

The campaign of persecution against
the Indians has thus far been directed
largely at their religious leaders and in-
stitutions. In attacking the Indians'
religious leaders, the Sandinistas are at-
tacking their source of unity and
strength.

Upon coming to power the San-
dinistas sealed off the entire Atlantic
coast. Travel to the region was allowed
only by special permit. Indians were
drafted into the militia. Those who
refused were shot or forcibly relocated.
Villages were forcibly evacuated and
then burned. By midsummer 1982, the
Sandinistas had destroyed 55 Moravian
i Ihurches.

In November of 1982, the
Misurasata Council of Ancients (elders),
the legitimate representatives of the
people of the three tribes, officially de-
n> »unced the Sandinista government
before the Organization of American
States.

In summary, then, when we examine
the state of religious freedom in

Nicaragua for Christians, the following
pattern emerges: harrassment and
subversion directed against the powerful
Catholic Church, brutal and undisguised
repression against the far weaker Prot-
estant churches. All of which is to say
that in relation to the churches, the San
dinistas have behaved the way Marxist-
Leninists always behave: they have
sought to destroy the weaker churches,
and to subvert the more powerful
churches.

Jewish Persecution

With this background in mind, let me
turn now to the situation of the Jewish
community in Nicaragua. A principal
source of information about Nicaraguan
Jews is Rabbi Morton Rosenthal of the
ADL's Latin American Affairs Depart-
ment. When Nicaraguan Jews came to
the ADL and informed it that being
Jewish was a major factor in their
forced exile and loss of properties, the
ADL made representations on their
behalf, in 1981, to the Foreign Minister
of Nicaragua. The ADL hoped that
through "quiet diplomacy" it could obtai
some clarification from the Nicaraguan
Government about the reasons for the
confiscations and the forced exiling of
the Jewish community. After 19 month j
having concluded that the Government
of Nicaragua was not going to respond
to any of its questions, the ADL publi-
cized the plight of Nicaragua's Jews wi
an article by Rabbi Rosenthal entitled
"Nicaragua Without Jews."

Rabbi Rosenthal points out that tht
Jewish community in Nicaragua has
always been small, numbering about 5C
families at its peak. Jews began coming
to Nicaragua in the late 1920s from
Eastern Europe. They dedicated
themselves to farming, manufacturing,
and retail sales and made significant
contributions to Nicaragua's economic
development.

Nicaraguan Jews never encountere
anti-Semitism until the Sandinistas
started their revolution. Even before tl
Sandinistas came to power they began
threatening Jews. A favorite tactic was
to anonymously phone Jewish homes
with warnings that "We are going to g
you Jews," claiming that Nicaraguan
Jews were responsible for Israeli arms
sales to the Somoza regime. Graffiti b,v
Sandinistas was widespread, with at-
tacks on Jews and their religion. One
was "Death to the Jewish Pigs." The
Sandinista initials — FSLN [Sandinista
National Liberation Front] — in red anc
black left no doubt as to who was
responsible. Another slogan painted on

Department of State Bullet »

HUMAN RIGHTS

ynagogue walls, and elsewhere, by San-
linista supporters was "Israel, Jews and
Somoza— The Same Thing."

In 1978, the synagogue in Managua
/as attacked by five Sandinistas wear-
ng face handkerchiefs. They set the
wilding on fire by throwing gasoline in
he main entrance doors, shouting PLO
Palestine Liberation Organization] vic-
ory slogans and anti-Jewish defamatory
inguage. As the doors caught fire, two
nembers of the community, at prayer
uring Sabbath services, ran through a
ide door. The Sandinistas met them
/ith a show of automatic weapons and
rdered them inside. The two members
•f the congregation, incidentally, were
ioth survivors of the Nazi concentration
amps.

When the Sandinistas came to
lower in July 1979, the storm broke.
>ome members of the Jewish community
/ere advised to leave "for their own
afety." Others, who had gone abroad
uring the last months of the revolu-
ionary stuggle, found that they were
nable to return. The Nicaraguan Jews
/ent into "exile" mainly in the United
Itates, Israel, and other countries of

ai Central America.

Isaac Stavisky, a textile engineer
/ho was born in Nicaragua, said, "I was

ill /illing to return to my native country
nd engage in my usual activities, but I
/as stopped cold." It was suggested that
e refrain from returning for his own
afety because he and his brother-in-law
: /ere considered enemies of the revolu-

lon.

ere

The president of the Jewish com-
munity, Abraham Corn, was jailed after
( he Sandinista victory. Gorn, who was
iiq hen 70 years old, was falsely accused of
I tealing some land and forced to sweep
treets during the 2 weeks of his con-
venient.

Nicaraguan Jews claim that Jewish-
wned property was among the first to
<e confiscated by the Sandinista gov-
rnment, while Nicaraguans of Arab
escent, because of the close PLO-
iandinista relationship, were able to re-
nain in Nicaragua and continue their
tsj'usiness activities, often similar to those
ngaged in by Jews.

The Sandinistas also commandeered
Managua's synagogue and covered the
our Stars of David at the front en-
rance with propaganda posters, and the
nterior with anti-Zionist posters. And
wen after the tiny Nicaragua Jewish
•ommunity had fled, the Sandinistas
, 'ontinued to engage in blatant
am manifestations of anti-Semitism. In July

September 1984

of 1982, for example, Nuevo Diario, a
Managua newspaper which closely ad-
heres to the government line, published
an article under the headline, "About
Zionism and the Palestinian Cause." It
spoke of "synagogues of Satan" and de-
nounced Jews "who crucified Jesus
Christ and . . . used the myth of God's
chosen people to massacre the Palestin-
ian people without mercy."

Two days later, July 17, 1982, the
same paper charged that "the world's

money, banking and finance are in the
hands of descendants of Jews, the eter-
nal protectors of Zionism. Consequently,
controlling economic power, they control
political power as now happens in the
United States." The paper even went so
far as to claim that President Reagan's
support for Israel stems from the fact
that he "must have Jewish ancestry."

Admittedly, we know of no laws in
Nicaragua that are aimed specifically at
Jews. There may well be no "official"

Captive Nations Week, 1984

PROCLAMATION 5223,
JULY 16, 19841

Once each year, all Americans are asked
to pause and to remember that their
liberties and freedoms, often taken for
granted, are forbidden to many nations
around the world. America continues to
be dedicated to the proposition that all
men are created equal. If we are to sus-
tain our commitment to this principle,
we must recognize that the peoples of
the Captive Nations are endowed by the
Creator with the same rights to give
their consent as to who shall govern
them as those of us who are privileged
to live in freedom. For those captive and
oppressed peoples, the United States of
America stands as a symbol of hope and
inspiration. This leadership requires
faithfulness towards our own democratic
principles as well as a commitment to
speak out in defense of mankind's
natural right.

Though twenty-five years have passed
since the original designation of Captive Na-
tions Week, its significance has not dimin-
ished. Rather, it has undeniably in-
creased— especially as other nations have
fallen under Communist domination. During
Captive Nations Week we must take time to
remember both the countless victims and the
lonely heroes; both the targets of carpet
bombing in Afghanistan, and individuals such
as imprisoned Ukrainian patriot Yuriy
Shukhevych. We must draw strength from
the actions of the millions of freedom fighters
in Communist-occupied countries, such as the
signers of petitions for religious rights in
Lithuania, or the members of Solidarity,
whose public protests require personal risk
and sacrifice that is almost incomprehensible
to the average citizen in the Free World. It is
in their struggle for freedom that we can find
the true path to genuine and lasting peace.

For those denied the benefits of liberty
we shall continue to speak out for their
freedom. On behalf of the unjustly persecuted
and falsely imprisoned, we shall continue to
call for their speedy release and offer our

prayers during their suffering. On behalf of
the brave men and women who suffer
persecution because of national origin,
religious beliefs, and their desire for liberty,
it is the duty and the privilege of the United
States of America to demand that the
signatories of the United Nations Charter
and the Helsinki Accords live up to their
pledges and obligations and respect the prin-
ciples and spirit of those international
agreements and understandings.

During Captive Nations Week, we renew
our efforts to encourage freedom, in-
dependence, and national self-determination
for those countries struggling to free
themselves from Communist ideology and
totalitarian oppression, and to support those
countries which today are standing face-to-
face against Soviet expansionism. One cannot
call for freedom and human rights for the
people of Asia and Eastern Europe while ig-
noring the struggles of our own neighbors in
this hemisphere. There is no difference be-
tween the weapons used to oppress the peo-
ple of Laos and Czechoslovakia, and those
sent to Nicaragua to terrorize its own people
and threaten the peace and prosperity of its
neighbors.

The Congress, by joint resolution ap-
proved July 17, 1959 (73 Stat. 212), has
authorized and requested the President to
designate the third week in July as "Captive
Nations Week."

Now, Therefore, I, Ronald Reagan,
President of the United States of America,
do hereby proclaim the week beginning July
15, 1984, as Captive Nations Week. I invite
the people of the United States to observe
this week with appropriate ceremonies and
activities to reaffirm their dedication to the
international principles of justice and
freedom, which unite us and inspire others.

In Witness Whereof, I have hereunto
set my hand this sixteenth day of July, in the
year of our Lord nineteen hundred and
eighty-four, and of the Independence of the
United States of America the two hudred and
ninth.

Ronald Reagan

'Text from White House press release.

HUMAN RIGHTS

policy of anti-Semitism. But as Rabbi
nthal has stated, the Nicaraguan
situation demonstrates that one does not
need official policy in order to persecute
a small community. It can be effected
far more subtly by threat, intimidation,
and confiscation, thus avoiding the con-
demnation that Nuremburg-type laws
would invite.

In light of these facts, and also in
view of the government's behavior
toward Christians and Indians in
Nicaragua, I do not think any sensible
person can fail to conclude that the San-
dinistas are indeed anti-Semitic. What
remains to be answered, however, is
why they are anti-Semitic? What have
they got against us?

Nicaragua's Anti-Semitic Rationale

I think there are two explanations for
Sandinista anti-Semitism — a general ex-
planation and a specific explanation. The
general explanation is that the San-
dinistas— as they themselves have fre-
quently proclaimed — are communists,
and, as such, share the general com-
munist antipathy toward Jews. The
specific explanation is that the San-
dinistas have long enjoyed a close rela-
tionship with the PLO, from whom they
have undoubtedly picked up anti-Jewish
beliefs and attitudes. Let me elaborate
briefly on both these explanations.

The simple fact is that one of the
wellsprings of our belief in human rights
and the dignity of man is the Jewish
tradition. This tradition asserts that all
humans are created b'Tzelem Elohim—m
• rod's image. From this it follows that
men are not to be used simply as means
to an end: rather, each is an end in him-
self. Every person has an equal right to
life, liberty, and the pursuit of happiness
by virtue of his humanity alone.
Everyone has his place in the sun, and
neither the place nor the sun was
created by the state.

For communists and their allies,
however, the notation that a man or a
woman can have a greater loyaltj to
God than to the state is completely unac-
ceptable. Atheism is not an incidental or
peripheral element of their ideology, but
its very core: Communist and radical
panics claim for themselves the at-
tributes of omnipol d omniscience
which .lews and others believe reserve to
I lod alone, Such parties also seek to con-

ill political, economic, social,
cultural, and other devi in their

and thai which they cannot
control, they seek to destroy. For this
m can perhaps besl be

understood as a modern form of
idolatry — an attempt to establish the
party as the final arbiter of truth,
justice, and morality.

Because Jews are unwilling to aban-
don their own way of life and submit to
totalitarian governmental controls, they
invariably arouse the enmity and hatred
of communists everywhere. Because
they recognize an authority higher than
the state, they are persecuted. And
because the State of Israel is a model of
a vigorous, successful, and thriving poli-
ty organized along democratic principles,
it, too, naturally arouses the enmity of
communists everywhere. Hostility to
Jews and hostility to human rights are
two sides of a single coin and are
characteristic of communist regimes in
general.

As to the long-standing PLO-
Sandinista collaboration, this has been
documented at great length by the ADL,
by the U.S. Government, by Israel, and
in an excellent pamphlet entitled
"Castro, Israel and the PLO" published
by the Cuban-American National Foun-
dation. Suffice it to say that Jorge
Mandi, a Sandinista spokesman, told a
reporter for the Kuwaiti newspaper Al
Watan (August 7, 1979), "There is a
long-standing blood unity between us
and the Palestinian revolution. . . . Many
of the units belonging to the Sandinista
movement were at Palestinian revolu-
tionary bases in Jordan. In the early
1970s, Nicaraguan and Palestinian blood
was spilled together in Amman and in
other places during the 'Black
September' battles."

The brutal fact of the matter is that
we face a world in which many countries
are ruled by systems of despotism and
repression. In this world, Jews have
enemies, America has enemies, liberty
has enemies, democracy has enemies.
And they are one largely coherent
group. This group views world politics in
terms of what it calls the struggle
against "Imperialism, Zionism, and Co-
lonialism." Imperialism, of course, refers
to the United States. Colonialism refers
to our allies in the Third World, and in-
cludes countries such as South Vietnam,
which has already been destroyed, and
Turkey and El Salvador, which have at

various times been targeted for destruc-
tion. And Zionism refers to the State of
Israel, and — let us be quite clear about
this — to the Jewish people as well. To
them, the enemy of humanity is the
same enemy whether he salutes the
Stars and Stripes or the Star of David.
It is, therefore, no accident, to bor-
row an old Marxist phrase, that the San
dinista hymn declares, "We will fight
against the Yankee, the enemy of
humanity." It is not an accident that
U.S. troops unearthed on Grenada an
agreement between the New JEWEL
Movement and Castro's Communist Par
ty of Cuba, stating the two are united b
"active solidarity . . . against im-
perialism, colonialism, neo-colonialism,
Zionism, and racism." It is not an acci-
dent that the honored guest at the San-
dinista's first anniversary celebration
was Yasir Arafat, to whom Interior
Minister Tomas Borge declared "We sa?
to our brother Arafat that Nicaragua is
his land and that the PLO cause is the
cause of the Sandinistas." It is not an a>
cident, in short, that whenever com-
munists are in power, Jews are
persecuted, Israel is attacked, and the
United States is vilified.

Conclusion

I began my remarks this afternoon by
quoting President Reagan's remarks on
Nicaraguan Jewry. He concluded by sa?
ing "Please share the truth that com-
munism in Central America means not
only the loss of political freedom but of
religious freedom as well." I would like
to take this opportunity to endorse the
President's words. The small Jewish
communities throughout Central
America understand that communism
poses a real threat to their very surviv;
as Jews. They understand that the
Nicaraguans and the Cubans must be
stopped from exporting revolution. The
recognize that the bitter fate which
befell their brethren in Nicaragua migh
easily be theirs, as well. And like the
embattled Jewish communities in Israe
and the Soviet Union, they look to us,
the American Jewish community, for
support and understanding. We cannot
let them down. ■

DeDartment of State Bulled

HUMAN RIGHTS

Human Rights in Cuba

y Elliott Abrams

Statement before the Subcommittees
w Human Rights and International
Organizations and Western Hemisphere
ffairs of the House Foreigji Affairs
'ommittee on June 27, 198A. Mr.
brams is Assistant Secretary for
human Rights and Humanitarian
ffairs. '

he history of Cuba over the last 25
ears is one of the great tragedies of
lodern times. It is the history of a
if ted and industrious people, whose
opes for freedom and democracy have
een cruelly and systematically denied.
t is the history of a liberal and
emocratic revolution which overthrew
le Cuban dictator, Fulgencio Batista,
nly to be betrayed by an even more
jthless dictator. It is the history of one
f the greatest tyrants of our time, Fidel
astro, who promised the Cuban people
lat he would restore democracy and
spect for law and human rights, but
istead established a dictatorship which
as brought ruin and misery to his
eople.

Cuba has been ruled for 25 years by
le one man, Fidel Castro, and a group
hich seized power in 1959. The Com-
lunist Party dominates all aspects of
aily life, controlling the means of pro-
uction and distribution of all goods,
ervices, and information; public com-
lunication, public welfare, and educa-
on; as well as national defense, foreign
elations, and public security. Under
nese circumstances, the human rights
f Cubans are systematically denied,
ubordinated to the aims of the Cuban
Communist Party, as defined by its
Maximum Leader," Fidel Castro.

..egal System Abuses

jxecutions to discourage political dis-
ent, for example, which began when
astro seized power in 1959, continued
hroughout 1983. There are credible
eports of summary executions following
ecret trials of civilians for alleged
'olitical offenses by military tribunals. A
nember of Jehovah's Witnesses, for ex-
mple, was reported to have been ex-
cuted in August 1983 for allegedly
preading "propaganda to incite armed
■ebellion." A 23-year-old student, Carlos
Alberto Gutierez, was shot for belonging
o a group caught painting anti-
overnment slogans on walls.

Cuban police commonly round up
persons in nighttime arrests. Friends,
neighbors, and family members have no
knowledge of their fate and frequently
are too intimidated to ask. Usually these
persons are tried and sentenced in
secret, but sometimes they are inter-
rogated and released. In 1983, several
Cuban-Americans "disappeared" while in
Cuba visiting relatives. No information
regarding their detention or where-
abouts was provided to the U.S. Govern-
ment nor to their relatives who inquired
about them. In one case, an individual
was arrested and held incommunicado
for 3 months. Upon being released, he
reported that he had been interrogated
about alleged espionage and counter-
revolutionary activity.

Conditions in Cuban political prisons
are barbaric and include the use of tor-
ture. Political prisoners who refuse "re-
education" are subject to particularly
harsh penalties, including the denial of
clothing, medical attention, and com-
munication with friends and relatives
outside prison. One former political
prisoner, Jose Rodriguez Terrero, who
was released in August 1983, spent 22
years in Cuban prisons, including
months at a time confined naked in a
tiny cell called a "drawer" which forced
the prisoner to curl up in an embryo-like
position. Also included among the forms
of cruel, inhuman, and degrading treat-
ment in Cuban prisons is the placing of
a prisoner in a small, sealed, unven-
tilated room, and totally isolating a
prisoner from other prisoners and from
the outside world. The use of psychiatry
for repressive purposes has been
reported by Dr. Abdo Canasi. He re-
ceived a 10-year jail sentence for his ex-
pose, and since his release from confine-
ment he is denied permission to leave
the country.

The Cuban legal system does not
provide internationally recognized stand-
ards of due process for defendants, and
is used to impose criminal sentences on
individuals who have been imprisoned
for political reasons, including lawyers
attempting to defend political prisoners
and those trying to establish free trade
unions. For example, in January 1983, a
Cuban court sentenced five persons to
death for having tried to organize a
"Solidarity-style" trade union movement
in Cuba. Subsequently, Cuban author-
ities arrested the attorneys who sought

to defend the five labor organizers.
Groups such as Americas Watch and
Amnesty International have estimated
that there are over 200 political
prisoners in Cuba; other estimates put
the figure at about 1,000. Americas
Watch also estimates that there are be-
tween 1,500 and 2,000 former political
prisoners to whom the Cuban Govern-
ment continues to deny employment. In
its 1983 report, Amnesty International
has drawn attention to the fact that
other political prisoners are refused per-
mission to leave Cuba, even when other
countries have been willing to give them
visas.

Restrictive Liberties

Freedom of speech and the press do not
exist in Cuba. All media outlets are
owned by the government or party-
controlled organizations and operate
strictly according to Communist Party
guidelines. No criticism of the policies of
the government, the party, or the
leadership is permitted. Artistic expres-
sion is also covered by these restrictions,
which require that artistic works serve
to reinforce the goals of the govern-
ment. Foreign publications, except those
from other communist countries, are not
available. Even private expression of dif-
ferences with government policies is
repressed by an informer network
operated by the politicized block commit-
tees, known as the Committees for the
Defense of the Revolution [CDR]. Those
who violate the prohibitions against
criticizing the government are im-
prisoned, and even those suspected of
potential opposition can be incarcerated
or detained in prison after the expiration
of their sentences under the so-called ley
de peligrosidad.

Freedom of assembly does not exist
in Cuba either. No free trade unions are
allowed to function. The Communist
Party operates a so-called "trade union"
federation called the Confederation of
Cuban Workers, which acts to enforce
labor discipline, encourage higher pro-
ductivity, and reduce labor costs, rather
than to defend workers' interests. The
rights to bargain collectively and to
strike are not recognized. In the last
year, over 200 workers have been prose-
cuted for trying to organize strikes in
the sugar and construction industries.
Five trade unionists were condemned to
death. But, according to reports, their
sentences were reduced to 30 years
after their cases became public
knowledge. The Cuban Government,

HUMAN RIGHTS

er at first denying the facts, has said
the "terrorists" received sev>

ference of
.ration of Trade Unions
in Prague, the Cubans defended the
sentences, explaining they were
necessary to block any possible attempts
set up a Solidarity-style organization.

Antireligious Activities

The Cuban Government also enforces an
active antireligious policy. In the earlj
years of the revolution, the extensive

lolic educational system was
destroyed by the government and hun-
dreds of priests were expelled from the

try.

Today . a network of formal and in-

lal re: trictions has the effect of
limiting religious activity. The official
state ideology of atheism is taught on all
levels of the educational system. Specific
constitutional and statutory provisions
are designed to restrict religious observ-
ance and education.

Among other restrictions on
religious practice enforced by the Cuban
Government are discrimination against
religious believers in educational and
employmenl opportunities, prohibition
on religious media, and restriction on
the construction of new churches.
Political meetings and work obligations
are regularly scheduled to conflict with
religious observances. Cuban law pro-
hibits the observance of religious events
when they conflict with work obligations
or patriotic celebrations. The July 26 na-
tional holiday, commemorating the at-
tack on Batista's Moncada barracks in
1953, has been promoted as a replace-
ment for Christmas, and the availability
of toys for children has been limited to
the 26th of July period to the exclusion
of Christmas. Similarly, Holy Week
observances are preempted by the week-
e celebration of the battle of the Bay
of Pigs.

Emigration Restrictions

Freedom of emigration also does not ex-
ist in today's Cuba. Although Castro
claims that Cubans are free to emigrate,
and though some left Cuba, as in
odus of 1980, the Cuban
I nnient routinely refuses to allow
ie country: there
thus a backlog of some 200,000 Cubans
who I .kod to emigrate. Th<

who opt to leave Cuba lose their jobs,

ards, housing, and personal
possessions. Then the emigrants are sub-
jected to government-orchestrated mob

attacks call "assemblies of repulsion"
and are required to work in agriculture
until they leave the island, a period that
can extend indefinitely. As an example
of the extent to which people will go to
leave Cuba, in early 1983 three young
Cubans seized a small group of
American tourists in Villa Clara prov-
ince and held them hostage to force the
Cuban Government to permit the
Cubans to depart the country. The
Americans were subsequently freed, and
the young Cubans reportedly sentenced
to death (later reportedly commuted to
30 years in prison).

The Cuban Government still refuses
to permit the departure of some Cubans
who sought asylum in the Venezuelan
and Peruvian Embassies in Havana
more than 3 years ago. Persons who
have attempted to flee Cuba by seeking
refuge in diplomatic missions have been
arrested and sentenced to terms of up to
30 years. According to an Agence
France press report, for example, the
noted Cuban dissident, Ricardo Bofill
Pages, was arrested on September 27,
1983. In April, Bofill had sought refuge
in the French Embassy, but was in-
structed to leave the embassy after the
French Ambassador received assurances
from the Cuban Vice President, Carlos
Rafael Rodriguez, that he would be
allowed to leave the country. Subse-
quently, two Agence France press per-
sonnel who tried to interview Bofill were
put under house arrest and expelled
from Cuba after 9 days.

The case of Cuban Ambassador
Gustavo Arcos Bergnes is also instruc-
tive. Arcos fought and was wounded at
Castro's side during the attack on
Batista's Moncada barracks. When
Castro took power, Arcos was named
Cuban Ambassador to Belgium, the
Netherlands, and Luxembourg. But, in
the mid-1960s he was recalled and im-
prisoned for 4 years for his democratic
beliefs. In 1979 his son was gravely in-
jured in a motorcycle accident in
Florida. The U.S. Congress appealed to
the Cuban Government to allow Arcos
to visit his son. The appeal was refused.
Months later, Arcos was charged with
attempting to leave the island without
the necessary papers and was given a
7-year prison sentence.

The reverse policy, forced emigra-
tion, can be just as cruel. Suddenly, in
1980 the emigration gates were opened.
During the rush that followed out of the
port of Mariel, when 125,000 Cuban

it people" fled to our shores, the
Castro government shipped along com-
mon criminals and many of Cuba's

psychiatric patients. The American
Psychiatric Association denounced this
action on September 28, 1980, saying it
was:

. . . Deeply concerned about the plight of
numerous recent refugees who have been
identified as mentally ill. There is growing
evidence that many of these Cuban citizens
were bused from Cuban mental hospitals to
the Freedom Flotilla to the United States. If]
this is the case, the transplantation of these
patients constitutes a grossly inhumane act
since it deprives the patients of their right to
psychiatric treatement within the context of
their culture and primary language.

To date the Cuban Government is
still refusing to take back any
Marielitos — including those who seek
voluntarily to return.

Standard of Living

The Cuban Constitution states that "the
home is inviolable." Nevertheless, no
aspect of an ordinary Cuban's private
life is free from government
surveillance. Telephones are monitored,
mail is opened, and one's comings and
goings are monitored 24-hours-a-day by
block wardens in the neighborhood Com-
mittee for the Defense of the Revolu-
tion. Meetings, parties, and other ac-
tivities are subject to particularly in-
tense scrutiny. Listening to foreign
radio and television broadcasts is
dangerous because of the surveillance by
CDR members. A jamming signal to in-
terfere with Voice of America broad-
casts has been noted in the Havana area
and presumably is used in other urban
areas.

The Cuban Government has never
allowed international groups to visit
Cuba to investigate human rights condi-
tions. Organizations such as Amnesty
International and Americas Watch,
which have sought access to Cuban
political prisons, have been rebuffed. No
domestic human rights organizations are
permitted to exist. Human rights ac-
tivists in Cuba who are not in jail are
forced to carry out their activities
clandestinely and must rely upon inter-
national nongovernmental agencies for
support and publicity. If apprehended by
the authorities, they are subject to pros- |a»
ecution under Article 61 of the Cuban
Constitution, which states "None of the 1
freedoms which are recognized for
citizens can be exercised contrary to
what is established in the constitution
and the law, or contrary to the existeno
and objectives of the socialist state, or
contrary to the decision of the Cuban
people to build socialism and com-
munism. Violations of this principle can
be punished by law."

•].
\

!'
..■;:
i-
&

Department of State Bulletii »i

HUMAN RIGHTS

Although apologists for Castro
etimes claim that some human rights
ilations were necessary in order to
ing about the rapid modernization of
Cuban economy, in fact, Castro's dic-
orship has deprived the Cuban people
their opportunity for a better
lonomic future. In 1958, Cuban income
r capita was the fourth or fifth
jhest in the hemisphere. Independent
idies have repeatedly shown that per
pita economic growth in Cuba is
long the lowest in the hemisphere. If
esent trends continue, by the end of
i century Cuba will be one of the
ser developed countries of the
nericas.

Castro's betrayal has also cost the
iban people their independence. In
59, Cuba paid its own way. Now even
stagnant standard of living can only
maintained with huge Soviet hand-
ts — $4.7 billion in economic aid alone
1982, $25 billion over the last 7 years.
Jit this aid is no bargain for Cubans.
Ir in return, Cuba sends combat and
Ickup troops to countries where the
£ viets seek to establish a sphere of in-
■■ence. In Angola and Ethiopia they
8 11 their blood and that of Africans to
1 jtect lef twing dictatorships from the
S.ger of their own people. All told,
jhre are some 70,000 Cubans, the so-
i led "internationalists," who serve the
I viet Union's interests in foreign lands.

It comes as no surprise, then, to
I .rn that as a result of 25 years of com-
y mist control, more than 1 million
I*bans — over 10% of the island's in-
Ibitants — have fled their homeland.
3 prived of their civil and political liber-
I s, their national independence, and
tt ?ir hopes for a better future, Cubans
I ve demonstrated their dissatisfaction
i th the regime through the only means
l ailable to them — by "voting with their

I St."

(inclusion

J lis, in broad outline, is the state of
1 man rights in Cuba. It is not a very
I etty picture. Neither, for that matter,
lit a new picture. The facts about
I iban repression have been available for
Jiny years now. Yet for just as many
lars, not a few intellectuals and jour-
.1 lists have been systematically denying
lese facts. Although I will not attempt
| describe this rather disgraceful
isode in any detail, I cannot resist giv-
y one example of the kind of wild
isinformation about Cuba which has
lped to shield the regime from inter-
.tional censure. I quote from a book
iblished in 1975 by two prominent

Ijptember 1984

Americans, Frank Mankiewicz and
Kirby Jones, titled "With Fidel: A Por-
trait of Castro and Cuba."

. . . Castro's Cuba is prosperous and its
people are enthusiastic, reasonably content,
and optimistic about the future. Perhaps the
overriding impression of three trips to Cuba
is the enthusiasm and unity of the Cuban peo-
ple. They are proud of their accomplishments
and sing songs about themselves and their
country that reflect this self-pride. . . . The
people work together and work hard — for
what they believe to be good for their
neighbors and therefore their country.

One of the reasons why I welcome
the hearings your committee is holding
on the human rights situation in Cuba is
that I hope they will serve to correct

misinformation of this sort. For too
many years, Fidel Castro has posed as a
champion of progress, and has suc-
ceeded in concealing the oppressive,
totalitarian nature of his regime. Simply
by telling the truth about Cuba, we can
help to expose Castro as the tyrant that
he is. At the same time, by telling the
truth we demonstrate our solidarity with
the principal victims of Castro's
regime — the long-suffering and much-
abused Cuban people.

'The complete transcript of the hearings
will be published by the committee and will
be available from the Superintendent of
Documents, U.S. Government Printing Of-
fice, Washington, D.C. 20402. ■

Human Rights Situation
in Zaire and South Africa

by Elliott Abrams

Statement before the Subcommittees
on African Affairs and Human Rights
and International Organizations of the
House Foreign Affairs Committee on
June 21, 1984. Mr. Abrams is Assistant
Secretary for Human Rights and
Humanitarian Affairs.1

Africa presents a difficult challenge to
U.S. human rights policy. Single-party
states, lack of a free press, and freedom
of speech; weak judicial institutions,
poor prison conditions, and the use of
force to control dissent are all too often
the rule.

ZAIRE

You have available the 1983 human
rights report [Country Reports on
Human Rights Practices for 1983] which
sets out Zaire's record in detail; you can
see that it is a troubled one. In my
remarks this morning I would like to de-
scribe the political, historical, and
cultural context for understanding the
human rights situation in Zaire. I would
also like to discuss why we believe it is
important to maintain a strong relation-
ship with this strategically important
country.

Strategic Importance

As you are well aware, Zaire has long
been a friend and key regional partner
of the United States and the West. It
has consistently worked with us, the

most recent examples being the respon-
sible role it played while on the UN
Security Council and its strong support
for the Government of Chad in its strug-
gle against the Libyan-backed invasion.
Zairian minerals, notably copper and
cobalt, are important to the West.
Zaire's strategic relevance, which is due
to its large size and population as well
as its common borders with nine African
countries, has never been more apparent
than now, as we work toward political
solutions in southern Africa. Stability in
Zaire is crucial if the delicate process
now underway is to be maintained.
Stability in Zaire is also the key to
stability in central Africa.

Zaire lived its first years of in-
dependence under extremely difficult
conditions. During the colonial period no
Zairians occupied positions of respon-
sibility and very few received a universi-
ty education. Belgian policy had been to
control life tightly and suppress dissent
in the Congo. Zaire's people were poorly
prepared to take over the responsibility
of governing themselves. Judicial institu-
tions, disciplined police forces, and
bodies of law and regulation based on
normally acceptable standards of human
rights did not survive the shocks of the
post-independence period. Rather, in-
dependence unleashed powerful forces
that Zaire's fragile political structure
was unable to accommodate. Hundreds
of ethnic groups, competing geographic
regions, and different ideologies clashed
against the backdrop of East- West

HUMAN RIGHTS

rivalry. nd anarchy were the

he day from 1960 until 1965.

>m this period were heard as
L977 and 197s, with the two
invasions of Shaba pro exiled ex-

Katangan gendarmes backed by Angola
and the Soviets. Zairians still suffer the
emotional and social consequences of
these traumatic events. A desire not to
relive the tribulations of that time goes
a long way toward explaining the inter-
nal stability that Zaire has enjoyed in
the years that President Mobutu [Sese
Seko] has been in power. As the United
States could well have to become in-
volved again if instability recurred,
stable government in Zaire is very im-
portant to us.

Current Conditions

I have briefly mentioned Zairian history
in order to give some context to my
comments on the current human rights
situation there, which has serious short-
comings. Arbitrary justice and problems
caused by low-paid and ill-disciplined
security forces plague the country.
Prison conditions are poor with inade-
quate food and medical care. People re-
main in preventive detention for long
periods of time during investigation,
because of shortages of lawyers and
magistrates and insufficient funds for
such services as transportation between
prisons and courtrooms. As in most
Third World countries, the press is con-
trolled and the flow of ideas is
restricted. In addition, the country has a
single-party political system which does
not espouse Western democratic prin-
ciples. President Mobutu's response to
continued political activity by ex-
parliamentarian activists who champion
a second political party— a violation of
Zaire's constitution— was internal exile
for the leaders and the arrest of key

iorters, some of whom are still in
jail. Thus in Zaire, as in most African
countries, it is not possible to call public-
ly for a change in government and re-
tain one's civil liberties.

Blemished as Zaire's human rights
record is, I would like to point out that
progress has been made. For example, a

live area that is little noticed is
acceptance of 250,000 refugees
from neighboring countries. There was a
general amnesl ar which

resulted in the release ol

mers and in the return of several
merit exiles. The [CRC [Interna-
1 'onimittee of the Red Cross] has
-it some Zairian prisons.
"'t'li few if any suni'

editions or disappearances in recent
years. Human rights conditions in Zaire
have improved over the past 20 years,
albeit fitfully rather than steadily.
Political opponents may be exiled to
small villages or periodically arrested,
but they are not killed or imprisoned for
life, as is unfortunately true in much of
the Third World. Zaire is very sensitive
to the views of the Administration and
the Congress on human rights, and our
concern has had a positive effect.
Although Zaire has a long way to go,
the government has shown it has the
capacity to listen to others and change.
It is important to keep in mind that
the United States has broad interests in
Zaire and is dealing with its government
on a number of key issues. We consult
on Chad where Zaire has given in-
valuable military and political assistance
to the Habre government. When Zaire
was on the UN Security Council in
1982-83, it was very supportive of U.S.
objectives. We also consult in the
economic area, where the government
has undertaken major reform steps. In
1983 Zaire successfully implemented
several reforms suggested by the IMF
[International Monetary Fund], including
an 80% devaluation of the zaire and the
institution of a floating exchange rate.
Controls on wage increases and the
liberalization of price controls have also
been adopted. The budget deficit has
been brought under control in spite of
low tax revenues because of severely
depressed copper and cobalt prices. The
successful implementation of these
reforms led the IMF to approve $350
million in new drawings for Zaire and
official creditors to reschedule Zaire's
debt in December. In reviewing the
situation in Zaire we see that they have
taken the steps we have recommended
to all countries on the continent — adop-
tion of a realistic exchange rate,
removal of price controls on foodstuffs
to encourage production, control of the
budget, and encouragement of the
private sector.

U.S. Assistance Projects

Respect for human rights forms a part,
albeit an integral part, of our bilateral
agenda with Zaire. In our dialogue with
I 'resilient Mobutu and his government,
our Ambassador and other high-level of-
ficials—including Assistant Secretary
(for African Affairs Chester A.]
Crocker— consistently point out the im-
portance which we attach to observance
of human rights. In addition to our
representations from the highest levels

down, we are taking specific steps to
promote observance of human rights in
Zaire. Part of our assistance effort is
directly targeted on projects designed t<
promote human rights. One example is
program financing the printing and
distribution of the penal code to increas
knowledge of individual rights and
privileges under Zairian law. We have
also approved funding operations of the
Center for Continuing Legal Education
in Kinshasa. We have provided
resources for a series of magistrate
training seminars to strengthen the
quality and scope of judicial services.

There are, of course, limits to what
we can do concerning full observance o
human rights in Zaire. We can and do
press the Zairian Government privately
and we can and do target our assistanc
on creating conditions under which
human rights can prosper. We cannot j
as far as some would have us and sup-
port the opposition group which has
sought to form a second political party
in Zaire. This would constitute a direct
intervention in Zaire's politics, in viola-
tion of its constitution, and would, we
are convinced, result in worsened rela-
tions and diminished U.S. influence in
the human rights field.

Human rights concerns are central
to our policy toward Zaire, and are on«
aspect of a complex and critical bilater
relationship. We have other policy goa <
which must also be taken into account
including political and strategic stabilii
in Zaire and the region and the develo
ment of Zaire. To protect our interest:
and achieve our goals we must mainta
our influence and deal with Zaire
cooperatively and on the basis of
respect. This approach will, we believt
be the best human rights policy as well
and will maximize U.S. influence in
Zaire.

SOUTH AFRICA

Turning to South Africa, I intend to p
sent to this committee as factual a pic
ture as possible of recent development
on the human rights front in South
Africa — both positive and negative
developments. A portion of the inform
tion I am providing here is drawn fror
the 1983 human rights report on Sout frj
Africa prepared by the State Depart
ment, which, I might note, has been
praised by the Lawyers' Committee fo
International Human Rights, America
Watch, and Helsinki Watch as "one of
the State Department's more successf
efforts to portray the human rights
situation in another country." I will al
attempt to update that report by

DeDartment of State Bullfi ...

Kill

HUMAN RIGHTS

cribing developments which have
en place since it was prepared in
cember. Finally, I will attempt to give
'jju some idea of how these factors af-
' :t U.S. policy toward South Africa.
As we observed in the 1983 human
hts report, South Africa is a
iltiracial country whose present con-
tution codifies the system of apartheid
der which the white minority holds a
mopoly of power in the country's na-
nal political institutions. The result
s been a parliamentary democratic
stem run by the 16.2% of the popula-
n which is white. Persons of "colored"
3 ixed blood) and Asian descent have
d no legal right to political participa-
n at the national level; and the over-
timing black majority has also been
nied national political participation,
cept through the device of tribally
sed "homelands" or "national states"
aated by the South African Govern-
>nt without regard to whether blacks
e in or wish to be associated with
ise areas.

institutional Reforms

In uth Africa has introduced a new con-
tution which will include a limited na-
nal franchise for South Africans of
I ored and Asian descent. This constitu-
n, approved by a 2-1 margin by white
ters in a referendum held last
ivember, is scheduled to go into effect

September 3 of this year. Although it
es not allow for participation by
itcks in the central government, the
uth African Government has stated
it the constitutional reform process
es not rule out further developments
lich could include extending participa-
n in national political processes to
uth Africa's black majority. Con-
lerable debate is underway in South
'rica over the meaning and direction of

se constitutional reforms.
Regardless of whether or not the
w constitution represents reform of
artheid or only its rationale and
xlernization, the practice of apartheid
mains the basis for the organization of
uth African society. Apartheid institu-
nalizes political and economic control

the white minority. Discriminatory
vvs and practices — such as legislation
niting South Africa's black citizens to
source-poor homelands, the influx con-

1 laws, the Group Areas Act, the
ixed Marriages and Immorality Acts,
d so forth — are woven throughout the
brie of South African society. The
>uth African Government has also
lacted legislation that, in the name of

security, curtails the civil liberties of
those persons of all races whose
statements, actions, or associations are
viewed as a serious challenge to the
established order.

In 1983 some improvements in the
human rights climate took place. On
July 1, for example, 54 persons were un-
banned, reducing the number of banned
individuals to 12, the lowest number in
recent years. The South African Govern-
ment took tentative steps to recognize
the right of blacks to live permanently in
urban -areas under certain conditions.
Black labor unions continued to grow
under the government's labor law
reforms.

• The efforts at limited power shar-
ing under the terms of the new constitu-
tion are moving forward. The new
tricameral parliament will sit in an ab-
breviated session during the month of
September. Although blacks remain ex-
cluded from the system, for the first
time legislation concerning blacks will no
longer be the prerogative of the white
parliament, but will require the concur-
rence of the Asian and so-called colored
chambers. In addition, the Minister of
Constitutional Development and Plan-
ning recently told parliament that the
South African Government does not
view the new constitution as final, and it

... a socioeconomic process is underway
which is contributing dramatically to the bargain-
ing power of South Africa's black population as
well as to the perception of white South Africans
that the status quo is untenable.

On the other hand detention without
charge or trial and "bannings" of in-
dividuals, organizations, publications,
and gathering continued. Despite orders
given by the South African Government
in 1982 for more humane treatment and
care of detainees held under security
laws, several died due to mistreatment
by police officials, or allegedly commit-
ted suicide in 1983. For the first time,
however, action was taken against police
and prison personnel who abused their
power.

We concluded in December 1983,
that while one can point to some positive
developments in recent years, South
Africa's fundamental human rights situa-
tion has changed little. There remains
no effective judicial remedy against the
denationalization of blacks into "inde-
pendent" tribal homelands or against
forced resettlements. Indefinite deten-
tion without charge or access to at-
torney and other judicial acts without
due process, such as banning, continue.
The 83.3% of South Africa's population
which is not white suffers from per-
vasive discrimination which severely
limits political, economic, and social life.

Recent Policy Developments

What has been the picture thus far in
1984? Let me outline some important re-
cent developments, both positive and
negative, which have taken place. On the
positive side:

is widely recognized that the issue of
black political rights must be addressed.

• A Parliamentary Select Commit-
tee is reviewing the Immorality and
Mixed Marriages Acts, seemingly with
an eye toward the modification or repeal
of both.

• In late April 1984, the Minister of
Cooperation and Development an-
nounced the withdrawal of the new
legislation governing the movement of
blacks in South Africa, the highly con-
tentious Orderly Movement and Settle-
ment of Black Persons Act. Its demise is
partially attributed to the fact that the
bill could have put in question the per-
manent residence rights of urban blacks
qualifying under Section 10 of the cur-
rent law, the Urban Consolidation Act,
including beneficiaries of the Rikhoto
decision.

• In February, the South African
Government announced its intention to
open central business districts in urban
areas to business people of all races. At
the same time, a recommendation was
made that segregation of public facilities
would be discretionary rather than man-
datory.

• No new banning orders have been
issued since August 1983. The number
of banned persons remains at 12.

• In early May 1984, the South
African Government announced its will-
ingness to relax the provisions of the

bptember 1984

HUMAN RIGHTS

Prisons Act governing press coverage of
■i conditions, shortly before an in-
eommittee released findings
which shocked the public.

• On February 22, 1984, Sergeant
.1. Van As of the security police was
sentenced to 10 years in prison for
shooting Paris Malatji while in detention
for interrogation. Van As was the first

■liceman prosecuted for an in-
cident carried out in the line of duty.

• In April 1984, three policemen at
the Dirkiesdorp Police Station were

for their role in the death of
Thomas Manana, who died while in
custody in early 1983.

• On January 1, 1984, the amend-
ment of the Defense Act which provides
for alternative service for religious ob-
jectors went into effect. The amendment
also created the Board for Religious Ob-
jection which determines the status of
religious objectors to military service.
Alternative service for conscientious ob-
jectors still does not exist. As of
February 14, 1984, 51 people had been
classified religious objectors. They were
all Jehovah's Witnesses.

• The situation in the "independent"
homeland of the Ciskei has quieted,
although conditions there are still unset-
tled and more than 30 people may still
be in detention.

• A new Matrimonial Property Act,
designed to raise the status of white,
colored, and Indian women before the
law, is under consideration by parlia-
ment and may be passed during the
present session.

• Yenda security police continue to
intimidate individuals they regard as
threats to state security. They use sur-
prise visits, unexpected searches, and
long questioning sessions in their own
offices to frighten people.

• In February 1984, Samuel
Tshikhudo died of illness while in deten-
tion in Venda after being held since
November 1983 incommunicado.

• Resettlement remains a mixed pic-
ture. A decision not to remove the peo-
ple from St. Wendolin's in Natal is offset
by the earlier removal of the residents
of Mogopa. The residents of Badplaas,
Leandra, Driefontein, Huhudi, and
Crossroads, among other places, still live
under the threat of removal. The South
African Government has not abandoned
the idea of the cession of Ingwavuma
and Kangwane to Swaziland, which
would result in the "removal" of large
black populations. Minister of Coopera-
tion and Development Piet Koornhof ad-
mitted in early May that about 2 million
black persons have been resettled by the
South African Government since 1960.
On April 27 the Prime Minister stated
that "forced removals" would no longer
take place in the future. This would ap-
pear to mean that henceforth the
government will attempt to induce peo-
ple to move by offering better housing,
facilities, and job opportunities
elsewhere. But this would seem to
signify a change in methods rather than
a departure from the policy of com-
pleting the process of "consolidation."

Regardless of whether or not the new constitu-
tion represents reform of apartheid or only its ra-
tionalization and modernization, the practice of
apartheid remains the basis for the organization of
South African society.

However, there have been negative
developments as well.

• Detentions continue; as of M
L984, a total of 286 persons had been
detained in South Africa on political or
ity grounds including 137 in Trans-
lue to recent student unrest. 30 in
Ciskei, and 1 in Hophuthatswana, so-
called "independent" homelands. Overall.

lumber of persons remaining in
detenl 31 is 38, the lowest

ne time.

• Prison sentences for treason and
security convictions vary considerably.
Carl Niehaus, a white university stu-
dent, was convicted of high treason and
sentenced to 15 years in prison for his
activities on behalf of the African Na-
tional Congress [ANC] and the South
African Communist Party. His fiancee,
Johanna Lourens, was sentenced to 4
years for her complicity. Two professed
A\'( ' members were convicted of high
t reason and attempted murder in early
April. They received in year prison
sentences. In December 1983, Mathews

Thabang Ntshiwa received a sentence c
3 years, of which 18 months were
suspended for 5 years, for advising, ad-
vocating, and encouraging the aims of ;
banned organization. Ntshiwa owned a
mug which carried ANC slogans. Also i
December 1983, Sister Mary Ncube
received a 12-month prison sentence fo
possession of banned literature. Eight
months of the sentence were suspendec
for 5 years. On the other hand, howeve
on April 2, 1984, Constable Nienaber
was acquitted of murder in the April
1983 shooting death of Dreifontein com
munity leader Saul Mkhize. The court
found that Neinaber acted in self-
defense, and that Mkhize was "arrogan
and impolite." Also, members of the
white far rightwing Afrikaner
Weerstandsbeweging received suspend
ed sentences in October 1983 for
charges of treason and possession of il-
legal weapons, despite having been
caught with a large weapon cache in-
cluding AK-47 assault rifles, explosive:
and ammunition.

• The South African Government
has refused permission for banned
Pastor Beyers Naude to travel to
Europe to receive an award.

• The initial findings of extensive
private research reveal that black Sout
Africans suffer from vastly inferior
standards of health, nutrition, housing
income, and education as compared to
whites.

In short, we must conclude, as we
did in December, that we are dealing
with a mixed balance sheet; that despi
certain improvements, the established
system of comprehensive control over
the lives of most South Africans remai
substantially in effect. Nevertheless,
there is a process of change underway
with major implications for the future
that system. This is a fact which objec-
tive observers cannot deny. Those whc
say that the situation is totally un-
changed, or has gotten worse, fail to
take this into account. Nothing could
make this more evident than the fer-
ment surrounding the new constitutior
which reflects a clear consensus amonj
white South Africans that genuine
change must occur if they are to sur-
vive. With the expansion of parliament
to include the Indian and so-called col-
ored South Africans, a door has been
opened and cannot be closed.

One of the major factors underlyin
this process of change has been the
dynamic of economic growth combined
with demographics. Whites increasingl
realize they cannot run their economy

HUMAN RIGHTS

thout more skilled labor, which blacks
e being trained to supply in ever
»a eater numbers. Black awareness of
"t eir growing bargaining power in the
» jrkforce is reflected in the spread of
'*" ick trade unions. Simultaneously,

ick purchasing power is also on the
i ! >e, and a distinct black middle class is
-' ' fact being formed with the ability to
m ercise important leverage in the South
M "rican marketplace. Those who believe
9 at the formation of a black middle
ii iss will result in political stagnation,
U ie to some perceived vested interest in
in rpetuation of the status quo, fun-
mentally misread what has always
ai Dtivated human beings, namely, a
• sire not just to obtain a higher stand-
d of living but also to exercise the
eedom which that higher standard
n — but does not always — make possi-
;. In short, a socioeconomic process is
derway which is contributing
amatieally to the bargaining power of
iuth Africa's black population as well
to the perception of white South
'ricans that the status quo is
tenable.

S. Policy Toward South Africa

■vould now like to turn to the question
how this situation affects U.S. policy
A ward South Africa. U.S. policy with
;» gard to apartheid is clear. Morally, the
iuth African system is completely con-
iry to our values. Morally "repugnant"
is the word President Reagan used to
scribe it. Politically, apartheid nur-
res instability which is contrary to
nerican interests in southern Africa,
lr national interest compels us to pro-
Dte peaceful but genuine evolution
/ay from apartheid and toward a
stem of government based on the con-
mt of all South Africans, regardless of
ce.

As we engage in this effort,
>wever, we must not lose sight of the
ct that just as a lasting basis for
gional stability requires evolutionary
lange toward government by consent
South Africa, so, by the same token,
e are not likely to see internal change
oceeding at an adequate pace and by
,'mocratic means if escalating violence
1 and across frontiers polarizes the
)litics and deepens domestic divisions
ithin South Africa itself. Thus, the
irefully negotiated agreements involv-
g South Africa, Angola, and Mozam-
que which have been reached in recent
onths hold immense potential for the
iture of peaceful, genuine, evolutionary
lange within South Africa itself. This is

eptember 1984

precisely one of the principal reasons
why U.S. diplomacy has been so deeply
involved in trying to establish a climate
in which such agreements could be
reached.

Remarkably, there are elements at
all levels of South African society which
are themselves engaged in the effort to
promote peaceful change, to find a solu-
tion to South Africa's problems which
somehow steers between the extremes
of continued repression and the anarchy
of racial conflagration. One of the fun-
damental but least well known facets of
U.S. policy toward South Africa is the
degree to which we are involved in sup-
porting organizations and individuals
who have committed themselves to
peaceful change in South Africa. Such
support, in a tangible form, com-
plements our moral and political opposi-
tion to apartheid.

This year alone, with the support of
Congress, we have devoted over $10
million in U.S. funds to programs de-
signed to uplift those disadvantaged by
apartheid: programs to provide black
South Africans with scholarships for
university study in the U.S., programs
to assist blacks in qualifying for a
university education, programs to assist
the emerging black entrepreneur with
acquiring management skills, and pro-
grams to train black trade unionists in
effective union organization and bargain-
ing skills. As these efforts gain momen-
tum, we hope that they will increase the
overall bargaining power of South
Africa's blacks in the context of the
growing demand within South Africa's
economy for skilled workers.

Congress has helped lead the way in
providing the resources and imagination
for these sorts of programs. Most
recently, Congress passed a $1.5 million
Human Rights Fund for South Africa,
which provided funds for small grants to
be made by the U.S. Embassy in South
Africa to organizations which promote
human rights. To date our Embassy has
allocated $197,650 on 23 projects, which
have supported activities such as
research on the legal status of black
women, farm schools, education, and
pensions; the purchase of resource
materials for centers which study legal
questions; training for labor unions; and
establishment of facilities where people
can meet to discuss human rights topics.

Support for peaceful change within
South Africa is not limited, I would add,

exclusively to the public sector. The ac-
tivities of those U.S. firms which have
joined the Sullivan code, employing
enlightened management practices and
providing substantial benefits to their
employees outside the workplace, are
setting the pace for progress in the way
blacks are treated by employers in South
Africa. To date, U.S. firms have spent
over $78 million on improvements for
black employees and their families.

As I indicated, these efforts are in-
tended to complement the political
facets of U.S. policy: our strict
adherence to the arms embargo on
South Africa, our refusal to recognize
the so-called "independence homelands,"
and our firm rejection of apartheid. But
in addition, fundamental to our ability to
influence events in South Africa is our
capacity to communicate with the
government's leaders. With them lies the
responsibility for shaping South Africa's
future. They have the power to deter-
mine the speed and the context of
reform.

Let me be plain: we do communicate
with these leaders, and frankly. If we
choose to speak in confidential channels,
we also do so firmly. No South African
leader has the slightest doubt about the
strength of American feelings when
essential human rights are abused.

But we must recognize that we are
dealing with another sovereign nation,
and by no means the only country in the
world to abuse human rights. We cannot
dictate to that nation's leaders how to
conduct their internal affairs, though we
certainly can, and do, offer our own
reactions to what we see. We have
chosen the path of constructive involve-
ment in efforts to promote peaceful
change in South Africa. Even if the pace
is too slow to suit those of us who would
prefer to see white South Africans join
tomorrow before a stunned world in
sharing gladly the wealth and control of
their nation with all their fellow citizens,
one must nevertheless concede that our
course is perhaps the only realistic one.
We intend to fulfill our commitment to
promoting peaceful change toward
government based on the consent of all
South Africans in the months and years
ahead.

'The complete transcript of the hearings
will be published by the committee and win
be available from the Superintendent of
Documents, U.S. Government Printing
Office, Washington, D.C. 20402. ■

PACIFIC

The ANZUS Relationship:
Alliance Management

by Paul D. Wolfowitz

Ad" ■ ' '(inference on the

Amer- • on Australian Deft n>;c

at tl Studies < 'enter of

Pennsylvania State University, Univer-

• i, on June 24,
1984. Mr. Wvli< \xsixtant

Secretary fur East Asian and Pacific Af-
fair*.

ANZUS [Australia, New Zealand, and
United Stales security treaty] is an
alliance of democratic nations committed
to peace. These two facts about the
alliance — our commitment to democratic
freedom and our commitment to
peace— are so fundamental to ANZUS
he} would be worth noting at the
outset even were they nothing more
than very broad statements of purpose.
But so far from being mere shopworn
generalities, these two facts have great
practical significance from the basic role
and function of our alliance — and even
for its day-to-day management —
significance which is often not suffi-
ciently appreciated.

It is because our nations are
democracies that the commitments we
make to one another are of great prac-
tical consequence and also why they are
so reliable. For our three nations,
vulnerable as we are to the infirmities
that are alleged to afflict democracies in
the conduct of their affairs, our alliance
commitments are important in bringing
a fundamental continuity into our rela-
tions. But it is also because these com-
mitments represent the commitments of
\\ hi ile nations to one another— not the
mere whim of arbitrary rulers— that it is
possible to rely on them. There is no
task more fundamental to alliance

ent than the constant nurtur-
ing of public support.

Our collective commitment to
rving peace is no less profound in
I'oi oui illiance

much f ANZUS con-

tions about what would hap-
nd how the various parties would
respond in the event of war. The trea

If, of course, contain com-

mitments of m

• I ittack. Yet ii

the important

that the I

of the alliance is to prevei

commitments from ever having to be
called upon. The operation of the
alliance in peacetime is every bit as vital
as its operation in time of war— indeed,
even more so. Particularly in a nuclear
age, the task of preserving peace is fun-
damental to alliance management.

The Determination of National
Interest in a Democracy

The old aphorism that nations have no
permanent friends, only permanent in-
terests, is still a popular one, but it con-
tains as much concealed falsehood as ap-
parent truth. Viewing the flux and per-
fidy of 19th-century alliances, it was cer-
tainly plausible— and perhaps even
somewhat comforting— to believe that
geography, historic rivalries, and
economic interests provide the constants
in a nation's decisions, while policies and
alliances form and founder around these
fixed goals. A nation, so this view goes,
may be obsessed by a particular threat,
must have particular ports or trading
opportunities — or, conversely, may have
no interest in a distant land— and should
form its alliances in whatsoever way will
promote these ends.

The notion of permanent interests,
impermanent friends, left a great deal to
be desired as a model for the conduct of
international relations, even in the 19th
century. And in a nuclear age it is a
very dangerous basis for democratic na-
tions to conduct their affairs.

Among its other weaknesses, the no-
tion of permanent interests leads to the
dangerous fallacies of permanent
disinterest and predictability. These can
all too often be used to excuse neglect, a
seductive choice for peace-loving
democracies that sometimes fail to
recognize the aggressive designs of
others.

Why, so the argument goes, must a
nation spend valuable resources to de-
fend against distant challenges? Why
maintain forces without a visible threat?
If grand political and military goals are
constant, there is no need to reassess
defenses and alliances will naturally tend
themselves. If decisions are always
logical, the need to prepare for unex-
pected contingencies is quite small.

But we know from long, historical
experience that alliances are hard to pu
together and to keep, that illogical and
unpredictable decisions are all too com-
mon, and that circumstances can chang
radically, often without a shot being
fired. The fall of the Shah of Iran, the
Sino-Soviet split, the attempt to place
Soviet missiles in Cuba, even a coup in
the small island of Grenada, created ne>
strategic interests and shifted political
and military thinking abruptly. Uncer-
tain or ambiguous political commit-
ments, even where interests seemed
otherwise clear, led to bloodshed in
1914, in 1939, in 1950, and even in 198J

I believe that countries, and in par-
ticular democracies like the United
States and Australia and New Zealand,
do have permanent interests. But they
are not only or principally the geo-
strategic interests on which past debati
has centered. Our nations' permanent i
terests are as much or more in justice
and the rule of law, in democracy and
freedom, and in peace.

In pursuit of these goals, we have
permanent "friends" as well: continuity
reliability, and strong alliances with
other nations that share the same
values. Surely nations that defend
freedom and the rule of law have a
sound foundation for the elements of
such permanent friendship. But these
foundations will only be maintained
through consistency, responsible polici-
and a commitment to cooperation. The
burden of maintaining such cooperatio
and policies in the first half of this cen
tury was too heavy to avoid world con
flagration. We must avoid such misste
in the nuclear era.

I would like to discuss today the r<
ANZUS plays in protecting all of our i
terests in peace and freedom — both in
regional context and as an important
factor in the calculation of world peace
For these issues are intricately linked.

Preserving Nuclear Peace

Effective alliances require a fundamen
tal faith in the responsibility of our
allies. As no issue is more important
today than preserving nuclear peace,
responsible policies to this end are a
crucial element in preserving confiden
among our countries. For this reason,
would like to begin a discussion of
managing ANZUS with a brief word o
managing this great issue of our times
the threat of nuclear war.

Surely, it is a topic on which much
has been said. The dangers of nuclear

Denartmfint of State Bulltr

PACIFIC

have become common political
ics worldwide. In my own country, no
ue takes greater precedence. Preserv-

nuclear peace is a duty we owe not
t to our friends and fellow coun-
yonen but to all the inhabitants of this
met.

"A nuclear war," President Reagan
s said, "cannot be won and must never
fought." He has said it in China. He
s said it in Germany. He has said it in
pan. He has said it in England. He
s said it in Congress. He has said it
the Oval Office. He has said it
roughout America. The essence of
■esident Reagan's policy on preventing
clear war can be crystallized in this
rase. It is a principle that has the
II support of responsible people
erywhere.

Much of the public debate on nuclear
;ues focuses on the enormous destruc-
e potential of existing arsenals. Presi-
nt Reagan has led the way in the
sponsible effort to reduce nuclear
ienals.

fen;

He has proposed the complete
t mination of an entire class of nuclear
i ;apons— intermediate-range missiles—
| d in negotiations with the Soviets, he
] s rejected any solution that would
! nply transfer such weapons from
Mere they threaten Europe to where

'fey could threaten Asia.

• In the strategic arms reduction

■folks (START), he has proposed deep
! ductions in intercontinental ballistic
ussiles, a goal no previous strategic
:i ms treaty has even approached.

Unfortunately, the Soviets tied prog-
:ss in START to preventing INF
I itermediate-range nuclear forces]
rployments in Europe, deployments
. : at our NATO allies requested in 1979
' offset massive Soviet deployments of
j new missile, the triple-warhead SS-20.
f ist November the Soviets walked out
i the INF negotiations and in
lecember suspended indefinitely their
; anticipation in START, apparently due
! their frustration over their failure to
j -event NATO's own counterdeployment
I' intermediate-range forces. We are
I'ady to resume both negotiations at
liy time and any place, without precon-
i tions. Our proposals are fair and
Jorkable. All the elements for an agree-
ment are on the table. We hope the
loviet Union will also come to recognize
Jiat its interests can best be served by

turning to the negotiating table as

Don as possible.

But the United States has not sim-
ply waited on Soviet responses to con-
trol nuclear weapons and to reduce their
destructive potential. We have acted on
our own to this end. Improvements in
our nuclear forces over the years have
made them safer— less vulnerable to sur-
prise attack, less prone to accident or to
unauthorized use, less susceptible to
seizure by terrorists. These improve-
ments in our nuclear forces are well
known, though insufficiently acknowl-
edged by those who propose to freeze all
changes to those forces. What is
perhaps less well known is the fact that
these improvements have made it possi-
ble to reduce the destructive potential of
our nuclear forces over the last 20
years.

Both the number and megatonnage
of our nuclear arsenal has been substan-
tially reduced. Our stockpile was one-
third higher in 1967 than it is now, and
the total yield has declined by 75% since
1960. The stockpile of U.S. nuclear
weapons in Europe has also been
dramatically reduced. The United States
and NATO allies withdrew 1,000 nuclear
weapons from Europe in 1980, and we
agreed in 1983 to withdraw an addi-
tional 1,400 weapons over the next
several years. These reductions will be
realized even if we have to carry
through with the deployment of ground-
launched and cruise missiles, as NATO
decided in 1979 that it would do if no
agreement with the Soviet Union to ban
or limit those weapons can be reached.
For each new weapon that would be
deployed in that event, we have
withdrawn an old one. Thus, when all
NATO withdrawals are taken into ac-
count, we will have withdrawn a total of
five weapons for each new one that we
may introduce under the 1979 decision.

Yes, America has begun to rebuild
its nuclear forces, even as we have
sought to reduce them. But we have
done so only after a decade of
restraint— restraint unmatched, indeed
exploited, by our adversaries. And we
have done so only to avoid the more
destabilizing situation when an adver-
sary might be tempted by forces suscep-
tible to a successful first strike.

The United States has consistently
taken responsible positions on reducing
the level of nuclear armaments— posi-
tions worthy of our allies' support. The
United States also has undertaken a
number of other important arms control
initiatives to reduce the risk of war and
halt or reverse the growth in weapons.

In Geneva, Vice President Bush
presented to the Conference on Dis-
armament in April a draft treaty for a

eptember 1984

comprehensive ban on the development,
production, stockpiling, transfer, and
use of chemical weapons.

In Stockholm, together with our
NATO allies, we have put forward a
package of confidence-building measures
designed to reduce the risk of a Euro-
pean war occurring by accident, surprise
attack, or miscalculation.

In Moscow, we have proposed a
strengthening of U.S. -Soviet com-
munications through a technical
upgrading of the hotline to help contain
possible crises.

In Vienna, at the mutual and
balanced force reduction talks we have,
again with our European allies, pre-
sented a new initiative this April that
seeks to find a common ground between
Eastern and Western positions, and to
make progress on reducing conventional
forces of NATO and the Warsaw Pact.

These, too, are worthy of our allies'
respect and support.

A Commitment to Peace and Freedom

The public debate on the levels of
nuclear weapons is an important one.
But whether our forces freeze at current
levels, or gain or diminish slightly, the
potential destruction remains unaccept-
able.

The public debate on how we pre-
vent nuclear war is, therefore, of even
greater relevance to our fate, but unfor-
tunately, attracts less attention. The
prospects of preventing nuclear war de-
pend on far more than just nuclear
weapons themselves. Peace will depend
on a stable nuclear deterrent, but it will
also depend on preventing the regional
conflicts that can, unexpectedly, lead to
wider confrontations.

Herein lies the second great
challenge for preserving our freedom
and world peace. Our alliance com-
mitments play a crucial role in meeting
that challenge.

The initial and most basic step in the
effort to preserve peace and freedom is
the national decision to make the at-
tempt—and the national will to per-
severe. My country, like Australia and
New Zealand, considered itself for most
of its history secure behind vast ocean
frontiers. Even after World War I, we
maintained this illusion. Only after the
painful lessons of World War II did we
learn, as smaller nations like Norway
also learned so painfully, that neutrality
does not ensure safety. Since that time,
each of our three countries has faced up
to the high costs of isolationism in an in-
terconnected world; each has committed

PACIFIC

itself to the search for peace beyond our
borders, not merely in home waters but
in the Pacific and in areas as distant as
Africa and the Middle East.

In the aftermath of our difficult ex-
perience in Vietnam, America had a
renewed flirtation with a reduced inter-
national role, even with isolationism.
There were strong feelings in America
to draw back into ourselves. We con-
sidered withdrawing our troops from
Korea and other lands where they are
vitally needed. We considered reducing
our fleet in the hope that we could
"swing" ships as needed from one
theater to another, ignoring the very
real possibility that this could increase
the chances of a two-ocean challenge
and, even more immediately, would have
significantly reduced the U.S. presence
in the Pacific.

But with the steady growth of
Soviet military forces and the increasing
and alarming tendency of the Soviets to
use that force, either directly them-
selves—as in Afghanistan— or in-
directly—as in Kampuchea, Ethiopia,
Chad, and elsewhere— we emerged from
our Vietnam experience with renewed
determination, restored confidence, and
a heightened sense of realism.

Our determination and confidence
led us to begin to rebuild our forces and
to speak more forthrightly for freedom.
Our heightened sense of realism gave us
a clearer view of the dangers posed by
our adversaries and a desire to further
the increasing self-reliance among our
friends, including those in Asia. If most
of Asia is largely peaceful despite the
increase in Soviet activities and
capabilities, surely it is due in part to
our renewed role and the growing
strength of friends.

America's return to a more vigorous
role in the world is testimony to the
staying power of democracies in foreign
affairs, a quality that has often been
questioned by political theorists, in-
cluding that most brilliant analyst of
democratic politics, Alexis de Tocque-
ville. Our alliances were one of the key

- that kept America from straying
from its course. Without these alliances,
ight well have accepted a lessened
role— to the detriment of all our coun-
Through the alliances, we main-
learer view of where our true
interests and responsibilities lie.

Indeed, not just America but
democracies in general have succeeded
extraordinary degree since World
1 1 in maintaining a constancy of
policy. During this same period, the

world on the whole has also enjoyed an
extraordinary period of peace among the
major powers, a peace of critical impor-
tance in the nuclear age. Both of these
achievements are, in large part, a
tribute to the strength and vigor of the
West's interlocking set of alliances. In
the circumstances, I believe, a heavy
burden of proof falls on those who would
weaken a system of alliance that has
contributed so much to the maintenance
of nuclear peace.

This is not to say that our systems
of alliances cannot be improved upon.
Constant efforts are still required, and
complacency can be as dangerous as ex-
cessive anxiety. But our alliances on the
whole make an invaluable contribution,
and no one has as yet put forward a
surer way of preserving the peace. Cer-
tainly the isolation of each nation for
itself is not such an alternative.

ANZUS reflects our countries' joint
determination to avoid the dangers and
painful lessons of isolationism or
neutralism. Each of our nation's com-
mitments eases the burden of com-
mitments, real and psychological, of the
others. Our joint pledges give each of
our pledges added meaning.

The question is not so much whether
any one ANZUS country could prosper
as a neutral under the umbrella of
others' active roles but whether the
other countries would choose to continue
active roles once one chose to withdraw.
There are Americans who continue to
question our role in NATO, despite
strong European commitments, because
of what they see as inadequate defense
spending. I have little doubt that such
questions would increase dramatically if
the European commitments themselves
came into serious question.

Today, our three countries' com-
mitments remain firm. Only last year,
the ANZUS review confirmed that the
treaty "remains relevant and vitally im-
portant to the shared security concerns
and strategic interests of the three part-
ner governments." Let there be no doubt
in the mind of any potential adversary
that an armed attack on an ally would
require, and would receive from the
allies, full and prompt fulfillment of the
ANZUS security commitment including,
when necessary, military support.

The national security of each of us is
a fundamental interest of the others and
requires adequate and appropriate
response to threats or attacks on allies
from any source. In the case of an at-
tack on Australia, for example, our com-
mitment remains firm whether the at-

tack should come from the Pacific or
Indian Ocean approaches. Our commit-
ment to the defense of our allies is not
limited to any particular threat; it ap-
plies to any potential aggressor.

In the Falklands crisis when our
NATO ally, Great Britain, was wrong-
fully attacked by a Latin American
friend, America did everything it could
to negotiate an end to the crisis. But
when negotiations failed, we took a
strong stand on behalf of our wronged
ally, despite the predicted high costs of
such a stand. We were strongly com-
mitted to doing what was right in sup-
port of our ally — even though we were
under no treaty obligation to do so.
(NATO does not extend to the South
Atlantic.)

The U.S. presence in the Pacific
over the past 40 years has been a
stabilizing one that has served the in-
terests of our friends and allies in the
region. ANZUS has been one of the
critical factors supporting this stability.
In the last 40 years, as well, countries o
the region have made great progress
toward democracy and the rule of law.
These, too, are stabilizing factors. While
these conditions prevail, it is difficult to
see a situation in which ANZUS
members would be called upon to fulfill
their commitments in a dispute involvinj
another friendly power. Indeed, a
weakening of ANZUS or the consequen
weakening of the U.S. role in the Pacifi
is one of the few events that could con-
ceivably make such hypothetical imagin-
ings a reality. ANZUS is not weaker
because its members have other com-
mitments. These commitments do not
conflict, they interlock; and in so doing,
they help to prevent conflict.

By our alliances, we add ever
greater echoes of support to alliances
throughout the free world. There are,
for example, no direct political or legal
linkages between ANZUS and the Five
Power Defense Arrangement. However
any potential aggressor in Southeast
Asia must take into account that
ANZUS alliance interests would be
threatened by an attack engaging
Australian and New Zealand forces
there.

A strong NATO strengthens deter-
rence globally to the advantage of
ANZUS. But equally, the health of
ANZUS is vital to the global Western
alliance— especially given the increasing
ly important locations of both Australia
and New Zealand. It would be a mistaki
to underestimate the moral and political
influence of this alliance of three of the
world's oldest democracies.

Department of State Bulletii

PACIFIC

Some argue that alliances are
ngerous in the nuclear era. But an
imited nuclear war will leave no cor-
r of our world safe and secure. No na-
n can hide its head in the sand and
nt on being spared— a point made on
ne 6 in Parliament by [Australian]
ime Minister Hawke.

The enjoyment of freedom cannot be
parated from the responsibilities of
edom— responsibilities the three
vIZUS countries have shouldered
uarely. Clearly, there are risks
sociated with engaging directly in
terrence through active cooperation in
najor alliance. The United States has
llingly assumed such risks on behalf of
allies. We have done so because we
lieve, as Prime Minister Hawke and
reign Minister Hayden have recently
d eloquently argued, that such risks
significantly less than those
jjsociated with the weakening and
f lure of deterrence.

Imaging ANZUS

(ice there is the will to take alliances
E-iously, the problems of managing an
jiance come into full play. ANZUS, like
IVTO, provides the elements for peace.
u liance management is the art that
j ts meaning into the framework that
t i treaty provides.

Successful alliance management
c pends on our success in meeting five
c tical challenges.

First, as an alliance of democracies,
I <JZUS inherits the challenges democra-
ic s face in running a coherent foreign
j Key. Policies that do not sustain public
spport will fail. Needed policies that
.1 'k public support can go unrealized. In
1 ort, alliance management requires an
< en and informed public debate led by
( izens mindful of the great, not just
1 e immediately visible, threats the
i ture holds.

Second, an effective alliance among
1 ree vital democracies requires exten-
j 'e, ongoing contacts at all levels of
jj'vernment and society. The need for
\ ordinated political and military ac-
uities requires close official ties and
rong institutionalized consultative
ocesses. But they also require lively,
formal public commentary and per-
nal interchanges (including con-
rences like this one). Together these
sure a constant flow of information
id views on potential problems, as well
a full awareness of each other's con-
rns, interests, capabilities, and objec-

tives. Only through such exchanges can
alliance managers reach decisions that
serve a common purpose.

Such exchanges cannot be turned on
and off as crises arise and recede. To be
effective, they must continue at all levels
over time and reflect the high degree of
mutual confidence derived from ex-
perience and personal contact.

Fortunately, the management of the
ANZUS alliance in all three capitals pro-
vides precisely that kind of consultative
relationship. At the so-called working
levels, there are literally daily contacts
between both civilian and military of-
ficials, including a throughly institu-
tionalized sharing of intelligence and
related assessments. At a higher level,
there are frequent major meetings of
senior officials to exchange views on
issues of immediate concern to the
alliance.

Most importantly, there is the on-
going dialogue— through meetings, cor-
respondence, and communications— be-
tween ministers in the three capitals.
The annual ANZUS Council meeting
provides a vital element that links
political leaders and symbolizes the
significance of the relationship.

On the military side, even without a
pattern of integrated commands and
military forces as in NATO Europe,
ANZUS alliance managers over the
years have built up a pattern of close
defense cooperation which assures that
ANZUS forces can operate together
quickly and effectively, if that is ever
necessary. Key elements of this coopera-
tion are joint exercises between our
forces, especially our navies.

The third challenge of alliance
management is to meet the need for
continuity and long-term consistency of
policy. President Reagan came into of-
fice committed to demonstrating that
the United States is a reliable ally and
partner. Accordingly, while he has
brought strong views of his own to the
definition of new policy areas, he has
shown great respect for commitments
made by previous administrations. That
element of continuity between ad-
ministrations is essential to effective
management of alliances between
democracies.

I could cite examples as far afield as
the Middle East, Central America, and
southern Africa to make my point, but
let me stick for now to some of more
direct concern to ANZUS. In the area of
arms control, President Reagan main-
tained the U.S. commitment to both

-September 1984

tracks of the 1979 NATO decision, while
offering his new and imaginative pro-
posal on the "zero option" for the arms
control track. He announced that the
United States would observe the limits
of the unratified SALT II [strategic
arms limitation talks] Treaty while seek-
ing to negotiate a better substitute for
it. With respect to China policy, the
President has made very clear his deter-
mination to maintain the framework
provided by previous U.S. commitments
in this area, at the same time that he
has worked to put that critically impor-
tant relationship on a more realistic and
stable basis. The views and concerns of
our NATO and ANZUS allies were, and
are, important in shaping U.S. arms
control policy. And I can say from direct
personal involvement that ANZUS views
were of great importance at critical
junctures in the development of this Ad-
ministration's China policy.

Fourth, there is a need to accept the
mutual burdens as well as the mutual
benefits of alliance. It is in the nature of
alliances that the precise levels of the
burdens and benefits will shift over
time. Concerns that another partner is
getting a "free ride" plague every
alliance in some form. Indeed, alliances
can be endangered as much as
strengthened by too fervent an effort to
make all burdens precisely equal at any
given moment to the benefits received.
What is important to a healthy alliance
is that the burdens be shouldered by all
parties as needed and when needed, and
that the benefits be shared as well.

Article II of the ANZUS treaty
binds the partners "separately and joint-
ly by means of continuous and effective
self-help and mutual aid" to "maintain
and develop their individual and collec-
tive capacity to resist armed attack."
Because the ANZUS democracies, as the
NATO allies, are dedicated to preserving
the peace, not fighting a war, there is a
tendency in all our countries to resent
spending resources for defense that
seems unnecessary at the time. Yet,
when the danger becomes evident, it
may be too late or seem too provocative
to begin to rearm. There, once again, a
well-informed public is essential.

Domestic political pressures and
miscalculations in Argentina led to a
wholly unexpected war in the
Falklands— a war for which Britain was
just barely prepared. British naval plan-
ners, prior to the Falklands, assumed
that their forces would be used relative-
ly close to home, that they would never
have to engage without allies, that land-
based air support would always be
available, and that landings against
hostile forces would not be needed.

REFUGEES

These comfortable assumptions lowered

pi tiding. Hut an un-
predictable world made them predictably
dangerous.

United States, for its part, is in
the midst of a substantial effort to in-
crease its conventional forces. We have
done so not to provoke, but to defend;
in.! to escalate, but to provide the means
by which problems can be contained. By
strengthening our conventional deter-
rent we help to increase our options and
reduce the risks of nuclear war. In this
defense effort, too, we have kept our
allies closely informed.

The United States attaches critical
importance to the opportunity to use
Australian and New Zealand ports that
provide ready access to the South
Pacific and Indian Oceans. We view
Australia's and New Zealand's will-
ingness to allow us use of their ports as
part of their contribution to ANZUS.
We also value efforts to assure stand-
ardization or interoperability of equip-
ment and weapons systems, share in-
telligence, exchange personnel, and con-
sult on problems. The maintenance of

U.S. presence in the region, and the
demonstration of our ability to operate
effectively with our treaty partners, are
tangible physical evidence of our treaty
commitments. All of the ANZUS nations
share in this effort and all benefit
from it.

Another and critical element of
defense cooperation is that involving the
joint facilities in Australia. Although the
subject of bilateral agreements between
Canberra and Washington, they clearly
are within the spirit of the provisions of
the ANZUS treaty. Indeed, such is
noted in the agreements.

There is, of course, considerable
public speculation about the use of these
facilities, including gross distortions or
misunderstandings of related U.S.
defense strategy. The simple truth, as
clearly and forcefully enunciated by
Prime Minister Hawke on June 6 in
Parliament in Canberra, is that these
facilities contribute to arms control, ef-
fective deterrence, mutual security, and
to stability in global strategic relation-
ships. Verification, early warning, and
the ability to control our nuclear forces
and communicate with them are critical

African Refugees
Relief Day, 1984

PROCLAMATION 5216,
JULY 9, 19841

The United States and the American
people have a long and proud tradition
ol helping those who are in need. In
Africa, the needs of refugees cry out for
continued attention. So, too, do the
needs of the host countries who, despite
their own limited resources, have ac-
cepted the refugees in the best tradition
of humanitarian concern. Their generosi-
ty has led them to make great sacrifices.

We in the United States are mindful of
the burdens that are borne by the refugees
>untries. We are dedicated to
meeting their needs new and in
the futt fervently hope that the Sec

ond International Conference on Assistant
to Refugees in Africa, which begins July 9,
1984, will le ed effort bj

t. •rnatmnal community to help African
Efectively cope with the refugee
11. Our own efforts have been and will

ir host countries.

liter .. • irem in the
' the needs of Africa's

refugees and the needs of their host coun-
tries, the Congress, by H.J. Res. 604, has
designated July 9, 1984, as "African
Refugees Relief Day" and has requested the
President to issue a proclamation in observ-
ance of that day.

As we reflect on the situation of refugees
and their host countries, I hope Americans
will be generous in their support of voluntary
agencies that provide relief and development
assistance to Africa. Further. I wish special
consideration be given to the extraordinary
hardships borne by women refugees, their
children, and other vulnerable groups. The in-
nocent victims of civil strife and war deserve
our special concern.

Now, Therefore, I, Ronald Reagan,
President of the United States of America,
do hereby proclaim July 9, 1984, as African
Refugees Relief Day.

In WITNESS Whereof, I have hereunto
set my hand this 9th day of July, in the year
of our Lord nineteen hundred and eighty-four
and of the Independence of the United States
of America the two hundred and ninth.

Ronald Reagan

'Text from Weekly Compilation of
idential Documents of July 16, 1984.

to both stable deterrence and to arms
control. In addition, this capability coul
be critical in preventing some bizarre ac
cident from turning into an unintended
catastrophe. For all of these reasons,
the facilities are an important, even
essential, part of the West's critical and
deeply felt commitment to maintain
world peace— perhaps the greatest
single challenge of this or any century, i

Fifth, as alliance managers in all
three capitals have recognized from the
outset of ANZUS, our treaty relation- I
ship is only part of the many-faceted
relations between our countries— com-
mercial, historic, cultural, and personal.
They are all important. They all affect
the course of the relationship and each
other. As we approach problems in any
one area, we must be careful to see
them in the perspective of the entire
relationship. If we do so, we will con-
tinue to have a strong reservoir of gooc<
will and self-interest from which prob-
lems can be solved. At the same time,
we will recognize that each element of
the relationship is a part of the whole
and that each is important and worthy
of our best effort for consultation, conn
promise, and deference to the interests
of all.

For alliance managers the essential
task, whether in Washington, Canbern
or Wellington, is to maximize coopera-
tion to mutual advantage when we are
on common ground and to contain dif-
ferences— legitimate though they may
be — through the kinds of compromises
necessary in an effective working part-
nership. By so doing, we can assure th
competition in commerce and differenc
in other areas do not threaten coopera
tion linked to our most fundamental
shared interest — mutual national sur-
vival.

Conclusion

Relations between America, Australia,
and New Zealand are truly broad and
vital. Our personal, commercial, and
cultural ties, and a common political
heritage dedicated to preserving and
enhancing individual liberty, have forge
uniquely close relations — relations
Americans value deeply. As President
Reagan said almost exactly a year ago,
"Our ties are a precious tradition, re-
flecting our many concerns and shared
values."

The ANZUS commitment is not
limited to paper. It resides in the heart
of Australians, New Zealanders, and

Department of State Bullet

SOUTH ASIA

ttiericans alike — in our affection for
another and in our profound belief
he rule of law. Our treaty commit-
t naturally requires that our actions
in accordance with our constitutional
cesses, but our deep ties ensure that
se processes will be swift and sup-
tive and embody the full spirit of our
>ples — the type of commitment
nocracies require and from which
nocracies profit. Speaking for the
ited States, I can say that Aus-
lians and New Zealanders should rest
ured that if any emergency confronts
m, the American system is capable of
isive action — and willing to render it.
The ties between our peoples will
■ays remain a powerful force. But
at the future holds for ANZUS may
foundly affect life within each of our
ions. Will freedom remain a vibrant
ce, uplifting peoples throughout the
rid? Or will freedom itself be a
itive, cowering in remote lands in the
>e that it is too small to note? In the
I, even that would prove a futile
oe.

Our freedom and world peace de-
ad primarily on our own commitment
mr mutual defense and the rule of
. The choice before us is not between
.ce and freedom. By promoting
sdom we build what is ultimately the
st secure foundation for peace as

Nor can we choose peace at the ex-
lse of freedom. Life in a world of
lalitarian powers would not be peace,
would peace between them long

I believe our countries have the will
inreserve freedom. There is an old
i ing: "If I am not for myself, who will
3 But if I am for myself alone, what
& I?"

I I believe our countries know what
n are — we are trustees of freedom. In
tl end, we can do more to protect that
6 edom and to build a safe and just

Visit of Sri Lankan
President Jayewardene

i rl

If we are strong, than if we are

ak;

• If we proceed with reason and
irage, than if we hang back until
derate responses no longer suffice;

• If we are united, than if we stand
>ne.

The path we must follow is an ar-
ous one — one not without risk. But
m few routes are quicker, and none is
ier. There are no shortcuts. ■

President J.R. Jayewardene of Sri
Lanka made a state visit to the United.
States June 16-23, 1984. While in
Washington, D.C., June 17-20, he met
with President Reagan and other govern-
ment officials.

Following are remarks made at the
arrival ceremony and dinner toasts
made by Presidents Reagan and
Jayewardene on June 18. 1

ARRIVAL CEREMONY2

President Reagan

President Jayewardene, Nancy and I are
very pleased to have this opportunity to
welcome you and Mrs. Jayewardene to
the White House.

Although our two countries are on
opposite sides of the globe, we share a
common bond in the great institution of
democracy. Sri Lanka has a remarkable
record among nations which won their
independence in the aftermath of World
War II. You've held elections at regular
intervals, and with amost equal regulari-
ty, your own hard-fought reelection in
1982, as a notable exception, your peo-
ple, through their votes, have removed
from power the governing party. And in

(White House photo by Michael Evans)

what distinguishes Sri Lanka as a truly
democratic country, losers as well as
winners accept the verdict of the people.
The true winners are, of course, the peo-
ple of Sri Lanka.

I'm told that in your embassy here in
Washington, pictures of every Sri Lanka
head of government since independ-
ence— those from your own party, as
well as the opposition — are respectfully
displayed. This is the kind of democratic
spirit essential to the success of human
liberty, the hallmark of democratic
societies.

Understanding and appreciating
your personal commitment to
democratic ideals, it is a pleasure for us
to have you as our guest. You under-
scored this heartfelt commitment during
your first visit here in September of
1951, during a gathering of the repre-
sentatives of nations who had fought in
the Pacific war. Some at that San Fran-
cisco conference insisted that Japan
should not be given its full freedom.
They argued that Japan should remain
shackled as a punishment for its role in
World War II. As the representative of
Sri Lanka, you spoke out for the princi-
ple of freedom for all people, including
the Japanese. You quoted Buddha, the

.Iptember 1984

SOUTH ASIA

cher, and said thai "hatred
atred, but by love."
ir dedication to
id will. This is more
■■.. ; it's a way of life.
This spirit makes its natural that our
two nations should be friends.

Unfortunately, not everyone shares
these values. Recently, we were re-
minded of the menace of those who seek
to impose their will by force and terror.
Two American citizens were kidnapped
in Sri Lanka and threatened with death.
I want to take this opportunity to thank
you personally for your diligence and for
your resolute handling of this difficult
situation. The skill and courage that you
demonstrated helped free our coun-
trymen and, at the same time, prevented
the terrorists from achieving their goal.

During that time of tension, you
wrote to me, and I want you to know
how much I appreciated your sharing
your thoughts. You wrote, "I hope that
the international community will be able
to eradicate terrorism, which has
become a major challenge to those of us
who believe in the democratic process."
Well, I speak for all my coun-
trymen— and after the economic summit
I recently attended in London, I know
this sentiment is shared by the people of
all the democracies— when I say the free
men and women of this planet will never
cower before terrorists. Human liberty
will prevail and civilization will triumph
over this cowardly form of barbarism.

We applaud your determination not
to yield to terrorism in your own coun-
try, as well as your efforts to find
through the democratic process a
peaceful resolution of communal strife.
There is no legitimate excuse for any
political group to resort to violence in
Sri Lanka, a country with a strong
democratic tradition and peaceful means
to resolve conflict.

As a nation of many races, religions,
and ethnic groups, we Americans know
from experience that there is room for
all in a democracy. Dividing your coun-
try into separate nations, as some would
have you do, is not the solution. Instead
of separating people, now is the time to
bring them together. In the same spirit
you spoke about in San Francisco three
decades ago— of love, not hatred, a
united, progressive Sri Lanka can flour-
ish and live in peace with itself and the
rest of the world.

We wish you every success in your
search for reconciliation and a better life
for all your people. And their lives are

ing Your leadership has in-
crease t ivity and brought down

unemployment, has created exciting,
new opportunities for your citizens. Sri
Lanka is among those enlightened na-
tions that understand incentives hold the
key for greater economic growth and
personal opportunity. I believe your peo-
ple and their children will reap rewards
for many years to come, thanks to the
bold economic steps that you've taken.

We're pleased that Americans are
playing a part in this effort. Your
endeavors to improve your people's
economic well-being continues to have
our solid support. Your country has vast
potential.

Sri Lanka is an example of inde-
pendent people determining their own
destiny and a country which the United
States is proud to count among its
friends. Mr. President and Mrs.
Jayewardene, welcome to America.

President Jayewardene

President Reagan, Madam Reagan,
ladies and gentlemen, I'm glad that Mrs.
Jayewardene and I were able to accept
the invitation extended by Mrs. Reagan
and you to visit your great country.

We have come a very long way from
home. Yet, already we feel we are
among friends who believe and try to
follow common ideals for the welfare of
humanity.

This is not our first visit. We came
in September 1951 to your west coast to
attend the Japanese peace treaty con-
ference held at San Francisco. I came as
my country's representative. I received
then a full measure of praise and
gratitude from members of the U.S.
Government of the day — Dean Acheson,
John Foster Dulles, and others who at-
tended the conference — for helping to
secure the acceptance by the conference
of the peace treaty with Japan. The
Japanese leaders, Prime Minister
Yoshida and others, were equally
grateful. Those alive are still so.

I mention that because the thinking
of the people of my country, which was
expressed by me on that occasion, was
that we should not ask for reparations
from a fallen foe who had harmed our
land and people also; that we should
forgive those who were our enemies,
quoting the words of the Buddha that
"hatred ceases not by hatred, but by
love," which you, also, Mr. President,
just quoted. I pleaded that we should
restore to Japan the freedoms of
democracy. Those were the ideals which
inspired us then and inspire us now.

< >ur history and civilization have sur-
vived in an unbroken sequence from the

fifth century B.C. for 2,500 years. Theji
were glimpses of modern democracy
even then, as in the appointment of
mayors to our ancient cities. The ruins,
of state buildings still contain carvings)
in stone where the cabinet of the kings
and their ministers sat. We were the I
first in Asia in 1865 to select members!
to the municipalities that governed oun
major cities and, in 1931, under univen
sal franchise, to exercise our right to \
elect the government of our choice.

We also have, in our country, an in
broken, historical record, extending ovj
the same long period, of a line of heada
of state, monarchies of different
dynasties from Sri Lanka and abroad, i
including India and the United Kingdoj
of two Presidents, one selected and ona
myself, elected by the whole country. ■
happen to be the 193d in the line of
heads of state from 483 B.C. to date. I

In our modern history, we cannot
forget the contribution made by an
American, Col. Olcott, when he helped,
the Buddhist leaders of Sri Lanka a hifl
dred years ago to establish a movemeiw
for the revival of education, through
schools owned and managed by the Bud
dhists themselves, and thus laid the
foundation for the revival of Buddhism
and the movement for freedom.

The United States of America, sindj
it was born out of a revolution which
freed it from foreign rule, has not been
known to be hankering after territory
supporting imperialism. Sri Lanka has
been for 53 years a practicing
democracy, where the freedoms of
speech and writing, of electing govern-
ments by universal franchise at regula:
intervals, and the independence of the
judiciary and of the opposition are
safeguarded.

Fundamental rights which are
justifiable are guaranteed under the co
stitution. Though there are occasions
when emergency powers have had to h
exercised, fundamental freedoms rema
intact. Democracy cannot, however, liv
and survive on a diet of words alone
The people require food for their
stomachs, clothing for their bodies, am
roofs over their heads.

In the nonaligned world of develop
ing nations, which covers the whole of
Central and South America, the whole
of Africa, the whole of Asia from the
Mediterranean Sea to the seas of Chin
and Japan, there are very few countri*
which could be called a democracy, sue
as is your country. Ours is one. That is
why the assistance that developing na-
tions of the world receive from the
World Bank and the International
Monetary Fund is appreciated, though
there are many matters on which we

Department of State Bulle'

SOUTH ASIA

there should be change to help them
ist as free countries.

e in the developing world have
lems similar to those who live in the
loped world. We have deficit
ets, high interest rates, old valued
•encies, and unstable exchange rates.

{j se are the classical examples of the

jj ptoms that affect both the developed
developing nations.
Those who speak so eloquently on
ilf of the developing nations have
1 pressing for the opening of com-
ity markets of the developed world
their manufacturers without protec-
laws, stable prices for all products,
rescheduling of debts borrowed for
?lopment. Consider these requests

sympathy and generosity.
In our own case, with the aid re-
ed, we have been able to commence
have almost completed the largest
?lopment program — which in our
■ history has ever been attempted by
• or president — a program possibly
jualled in magnitude by any develop-

^ t program in any country in the con-
porary world or earlier. This was

'4ible due to the effects of my govern-
t, which was elected to office in
7 in an election conducted by our op-

Jmts, the previous government. We
ined 51% of the votes and won five-
3" is of the seats in the legislature,
subsequently since then, we have

I five elections, including the

>t iidential election, byelections, district
0 icil elections, local elections, and a
e rendum.

' We have, however, our problems.
-C * of them are unique to our coun-
ts; -excessive rains, sometimes floods,
n slides, cyclones — some common to

II ountries, but still difficult for us to

Another and a modern problem, and
of universal occurrence today, is ter-
sm. This happened in the extreme
h of our country, where a group of
guided people of Tamil birth, who
e favored by the American people in
latter half of the 19th century by the
:tion of schools and hospitals, seek
iration from a united Sri Lanka,
re are more Tamils living in the east
among the Sinhalese, the major
munity, than in the regions that
c separation who do not support
n. My party holds 10 out of 12 seats
ne eastern province, which
iratists seek to join to the north.
The terrorists are a small group who
c by force, including murder, rob-
es, and other misdeeds, to support
cause of separation, including the

creation of a Marxist state in the whole
of Sri Lanka and in India, beginning
with Tamil Nadu in the south. Since we
assumed office in 1977, members of the
armed services and police, politicians
who leave the ranks of the separatists
and join us, and others, and innocent
citizens numbering 147 have been
murdered in cold blood.

I'm glad that your country is taking
a lead in creating an international move-
ment to oppose terrorism. If I may sug-
gest, it may be called a United Nations
antiterrorism organization. It is vital — it
is essential that the developed world
helps us with finances, that we help each
other in this sphere, and that all nations
cooperate to eliminate the menace of
terrorism from the civilized world.

I was very happy when I read your
address to the Irish Parliament on
June 4th. You made an appeal to nations
to reform the principle not to use force
in their dealings with each other. You
said the democracies could inaugurate a
program to promote the growth of
democratic institutions throughout the
world. You spoke on behalf of hundreds
of millions who live on the borderline of
starvation, while nations will spend next
year a trillion dollars on the manufactur-
ing of armaments for destruction of
human beings and their products.

At meetings of members of the
Commonwealth in Sydney, in New Delhi,
at meetings of nonaligned nations in
Havana and in Goa, New India, I have
never failed to express similar ideas.
Nonviolence is "Maithri" compassion,
and the great teacher whom I follow,
Gautama Buddha, and the great teacher
you follow, Jesus Christ, and India's
great son, Mahatma Gandhi, preached
and practiced the doctrine of non-
violence successfully.

Let your great and powerful nation
take the lead in implementing these
ideals, and the world will remember that
the President of the United States of
America, Ronald Reagan, preached the
laying down of arms not through fear,
but by the strength of the conviction
that to follow right for right is right,
without fear of consequence, is a way
for civilized man to adopt. The voice of
America will then become the voice of
righteousness.

I thank you, Mr. President and
Madam Reagan, for inviting us and giv-
ing me this opportunity of speaking to
you, and for entertaining us so
hospitably.

Member 1984

DINNER TOASTS

President Reagan

Mr. President, Mrs. Jayewardene,
distinguished guests, and ladies and
gentlemen, it's a special pleasure to have
you with us. Sri Lankan leaders, in-
cluding yourself, have been to our coun-
try before. Tonight, however, is the first
time that a Sri Lankan chief of state has
been an official guest at the White
House. It's our honor to have you with
us, and Nancy and I hope your visit will
be followed by many more.

Our talks this morning reflected the
cordial and cooperative relationship
which exists between our two democ-
racies. When your government was first
elected in 1977, Americans were excited
by your bold program for economic
development. And you've led your coun-
try in a new direction, and by doing so,
you've created new opportunities for
your people and expanded the potential
of every Sri Lankan.

The accelerated Mahaweli River
project is part of your effort, as is free-
ing the Sri Lankan economy from the
controls and redtape that stifled prog-
ress and economic expansion. One in-
novation of particular interest to me is
the creation of a free trade zone. This
practical approach to development with
its open market is attracting investment
and unleashing the energy of the private
sector. And I hope those over on Capitol
Hill who claim enterprise zones won't
work here in our country will take notice
of the progress that you've made.

We in the United States are happy
that we've been able to contribute to
your progress. Our Agency for Interna-
tional Development is working with you
in the river program and encouraging
Sri Lanka's private enterprise sector.
With the incentives that you now offer
to investors, your country is attracting
business and capturing the attention of
American entrepreneurs and investors. I
think we can look forward to growing
cooperation between our governments
and our people on many levels.

U.S. -Sri Lankan cooperation comes
in many forms. Last year the Peace
Corps began a program to assist in the
upgrading of Sri Lanka's English-
language teaching skills. And today we
signed a science and technology agree-
ment which provides an umbrella for in-
creased collaboration. We look forward
to the early completion of negotiating on
a tax treaty and on a bilateral invest-
ment treaty. All this reflects the ex-
traordinary relationship that we're
building, a relationship of trust and
trade that will benefit both our peoples.

SOUTH ASIA

understand Sri Lanka's choice,
II developing country, to remain

aligned in matters of foreign policy.

respect genuine nonalignment. Yo tr
istently has been a forceful
voice for reason and moderation in
nonaligned councils. Your strong opposi-
tion to unprovoked aggression in

hanistan and Kampuchea has swelled
the international chorus calling for
restoration of independence for these

rutalized countries. We hope that
Sri Lanka will remain a strong moral
force in world politics.

And today, we came to know one
another better and to understand more
fully our objectives and concerns. Your
visit has undoubtedly strengthened the
bond between our two countries, and it's
laid a basis for even closer, more
cooperative relations between Sri Lanka
and the United States in the future.

Finally, I'd like to thank you again
for the elephant — [laughter] — a magnifi-
cent present that you gave us today.
I he elephant happens to be the symbol
of the President's political party, and by
coincidence — [laughter] — we happen to
be also that smart. [Laughter]

Ladies and gentlemen, may I ask
you to join me in a toast to President
and Mrs. Jayewardene, and the pros-
perity of our relationship with Sri
Lanka.

President Jayewardene

Mr. President, Madam Reagan, ladies
and gentlemen, I don't mind President
Reagan telling the public that the gift of
the elephant was accidental. [Laughter]
Bui privately 1 know it's something else.
| Laughter] The elephant led my party to
victory in 1977. I received 51% of the
votes. Any party that gets 51% of the
votes must win an election. And I hope
you will have the same luck in the
months to come.

I came here as a stranger, but I
find— already I feel I am among friends.
I've heard that the American people are
very friendly people, hospitable people.
Both qualities have been proved during
the last few days. I'm surrounded, I
understand, by film stars. Those whom I
saw in my youth were rather different.
( Iharlie Chaplin, Laurel and
Hard \rbuckle— [laughter]—

and Man I 'id,

I remember a story about Laurel
and Hardy. They ji French

Legion. They were waiting in the in-

i ing line.The sergeant came
"What are you doing here? Why do
you join the French Legion?" They said,
"We j< rich Legioi

forget." "To forgel what?" "We've

otten." [Laughter]

I haven't forgotten about the help
your country has given us during the
last few years. But I didn't come here to
ask for help. That's not my way. I'm
waiting to hear Mr. Frank Sinatra sing
"My Way." [Laughter] That's one of my
favorite songs, but I understand he
didn't like it. [Laughter] I used it in part
of my election campaign and asked the
people to vote for my way, which they
did.

Your country is, as far as the
Americans go, young. Our country is
old, very old. We go back to the fifth
century before Christ. We had Am-
bassadors at the court of Claudius
Caesar. You'll find it recorded in Pliny's
letters. He even mentions the name of
the Ambassadors. We had sent delega-
tions to China in A.D. 47, and I under-
stand the gift sent by our king to the
Emperor of China were water buffaloes
and hump cattle. The great Chinese

pilgrims Hsiian-tsang and Fa-Hsien
came to our country in the fourth cen-i
tury A.D. and the sixth century A.D. S
did Sinbad the Sailor, Marco Polo, and
Ibn Batuta.

For the first time, Westerners call
in the 16th century and the PortugueJ
came as tourists but stayed for 150
years. After that came the Dutch and
then came the English. And we are n»
once again, a free country. We wish to
be friendly with all and the enemies of
none. That is my policy and the policy i
our people.

We would like the people of AmeA
to understand us. In the long history ■
Sri Lanka, there have been difficult I
periods. There have been murders; the
have been assassinations; there have
been riots; there have been good deeds
and bad deeds. Last July we had one c
those bad periods. But in time to con
it will be forgotten.

Sri Lanka— A Profile

People

Noun and adjective: Sri Lankan(s). Popu-
lation (1983): 15.3 million. Annual growth
rate: 1.8%. Ethnic groups: Sinhalese 74%,
Tamils 18%, Moors 7%, Burghers, Malays,
Veddahs 1%. Religions: Buddhism, Hindu-
ism, Islam, Christianity. Languages: Sinhala
(official), Tamil (national), English.

Geography

Area: 65,610 sq. km. (25,322 sq. mi.); about
the size of West Virginia. Cities: Capital —
Colombo (pop. 1,262,000). Other cities—
Jaffna (270,600), Kandy (147,400), Galle
(168,100). Terrain: Low plain in the north;
hills and mountains in the south. Climate:
Tropical.

Government

Type: Republic Independence: February 4,
1948. Constitution: August 31, 1978.

Branches: Executive — president (chief of
late and head of government ). elected for a
6-year term. Legislative — unicameral
168-member Parliament. Judicial — Supreme
Court, Court of Appeals, High Court, subor-
dinate courts.

Political parties: United National Party
(UNP), Sri Lanka Freedom Party (SLFP),
Lanka Sama Samaja Party (LSSP), Com-
munist Party/Moscow Wing (CP/M), Tamil
United Liberation Front (TULF), .lanatha
Vimukti Peramuna (JVP). Suffrage: Univer

sal over age IS

Flag: On a yellow background, a red and
green stripe on the staff side; on the remain-

ing two-thirds is a yellow lion holding up a
sword, centered on a red square.

Economy

GNP (1981): $4 billion. Annual growth rat

1982 est., 4.8%; 1981, 4.2%; 1980, 5.8%;
1979, 6.3%. Per capita income: $266. Avg
inflation rate (1982): 10%-15%.

Natural resources: Limestone, graphit
mineral sands, gems, phosphate.

Agriculture (24% of GNP): ProductsM
tea, rubber, coconuts, rice, spices. A rable
land— 59%, of which 38% is cultivated.

Industry (18% of GNP): Consumer go(
textiles, chemicals and chemical products,
milling, light engineering, paper and paper
products.

Trade (1981): Exports— $1,069 billion:
tea ($335 million), petroleum products ($17
million), textiles and garments ($156 millio
Major markets— US ($146 million), UK ($6
million), FRG ($63 million), Pakistan ($56
million), communist countries ($85 million).
Imports— $1,831 billion: petroleum ($448
million), machinery and equipment ($201
million), sugar ($147 million). Major sup-
pliers—Saudi Arabia ($273 million). Japan
($258 million). US ($129 million). Iran ($12
million), UK ($1 1 1 million), communist cou
tries ($52 million).

Official exchange rate (March 1983):
rupees- US$1.

:•■

Taken from the Background Notes of June
1983. published by the Bureau of Public A
fairs, Department of State. Editor: J. Dan
Adams. ■

WESTERN HEMISPHERE

see in one of your newspapers
e is an advertisement in which some
le are trying to make us remember
day. It was a fatal day; several peo-
ere killed. It was not done by the
rnment; it was done by a gang of
igans, about which we are very,
sorry. I'm trying to forget it. I'm
lg to make our people not com-
J— some of them — such incidents
s n. I hope we will succeed.

I remember when one of your
H esentatives came to see me and had
h with me. I told her — she is your
esentative in the United Nations
'ionization — "A leader must know only
words." She said, "What's that?" I
"Yes and no." And I think Presi-
Reagan knows those two words
well. Once you say yes or once you
no, stick by it. Whatever happens,
;r change. That has been my policy,
it has succeeded.
Therefore, we're surrounded by
ids. We've been very happy the last
days. I have a few more days to
id. I hope to spend some time in the
an settlements at Sante Fe, not for
other reason but because those were
stories I read in my youth, about
alo Bill and the various tribes. I'm

a: inated by the fact they were the
k st human settlements, as far as I
w, in the continent of America, and
eat people. And we must give them
lping hand as we must give every
, every tribe, every human being,
tever his caste, religion, or race, a
ie ing hand.

i We're all human beings. We extend
U affection, not only to human beings
>B even to animals; to the little
It hant that we have gifted to you.
'H t is the philosophy which we have
as ned in our country; that is the
a )sophy which, if I can, I'll spread
h ughout the world. And I find in you,
& President and Madam Reagan, two
'I ' good disciples.

I Thank you very much for entertain-
d| us. May your country prosper. May,
n ie morning and in the evening, at
ifitfall, may the name of President
4 gan and Madam Reagan, never be
J rotten.

J May I drink to the health of Presi-
llt Reagan, Madam Reagan, the
1 ernment and people of the United
•Ites of America.

Review of Nicaragua's
Commitments to the OAS

'Text from Weekly Compilation of
ddential Documents of June 26, 1984.
2Held on the South Lawn of the White
se where President Jayewardene was ae-
led a formal welcome with full military

by J. William Middendorf II

Statement made in the Permanent
Council of the Organization of American
States (OAS) on July 18, 1984. Am-
bassador Middendorf is U.S. Permanent
Representative to the OAS.

The U.S. delegation wishes to raise the
matter of the solemn commitments
made to the Secretary General of this
body by the Sandinista junta 5 years ago
on July 12, 1979. This is not interven-
tion— this is reviewing our own role
after commitments made to it by a
member state. As a result of these com-
mitments and our own OAS resolutions,
we brought down a sitting government.
Tomorrow will be the fifth anniversary
of the date that the junta took effective
control of Managua; but, regrettably,
very little progress has been made in
putting into effect these commitments.

You will recall that these com-
mitments were made as a response to
the resolution of the 17th Meeting of
Consultation of the Ministers of Foreign
Affairs of member countries of the OAS.
According to Document 25 of this body,
published June 30, 1981, this resolution
"for the first time in the history of the
OAS, deprived an incumbent member
government of legitimacy" when it asked
that the Nicaraguan Government be "im-
mediately and definitively" replaced.

The resolution in question said that
a solution to Nicaragua's problems was
exclusively within the jurisdiction of the
Nicaraguan people but then proceeded
to dictate how the problems should be
settled. In addition to demanding a sit-
ting president's ouster, the resolution:

• Said that a "democratic" govern-
ment was to replace the existing govern-
ment. Its composition was to include
"the principal representative groups
which oppose the existing regime and
which reflect the free will of the people
of Nicaragua";

• Said that the human rights of all
Nicaraguans, without exception, should
be respected; and

• Called for the holding of free elec-
tions as soon as possible, leading to the
establishment of a "truly democratic
government that guarantees peace,
freedom, and justice."

The Ministers of Foreign Affairs
went on to urge the member states to
take steps that were within their reach
to facilitate an enduring and peaceful
solution of the Nicaraguan problem
based on these points "scrupulously re-
specting the principle of non-interven-
tion."

They also asked that member states
promote humanitarian assistance to
Nicaragua and contribute to the social
and economic recovery of the country.
Many countries responded with an open
heart, including my own, with the
United States donating $118 million in
the first 2 years.

I would note that this 17th Meeting
of Consultation has never formally ad-
journed but only recessed. Given the un-
precedented involvement of all of us in
the process that brought the Sandinista
regime to power, the member nations
have a continuing interest— indeed, a
responsibility— in monitoring the situa-
tion in Nicaragua to see whether or not
the Sandinista government has, indeed,
carried out the commitments it so
solemnly made to us in 1979.

It is in this context that I propose to
examine the record here today, in order
to see exactly what has been happening
in Nicaragua since the Sandinista junta
assumed power there.

Here are the commitments which
the junta made to the Secretary General
in its letter of June 12, 1979:

• "... our firm intention to
establish full respect for human
rights. . . . ";

• "... our decision to enforce civil
justice in our country ... to let justice
prevail for the first time in half a cen-
tury. . . . "; and

• "... call Nicaraguans to the first
free elections that our country will have
in this century. ..."

To do justice to the full historical
record, there were two other promises
contained in the same letter, one which
spoke of a peaceful and orderly transi-
tion from the Somoza government to the
Sandinista junta and another permitting
so-called collaborators of the Somoza
regime, except those responsible for so-
called genocide, to leave the country.
But I will concentrate here on the mat-
ters of human rights, civil justice, and
elections.

tember 1984

WESTERN HEMISPHERE

It should be noted that those who
signed for the Sandinista junta were

mmandante Daniel Ortega, Violeta de
Chamorro, Commandante Sergio
Ramirez, Alfonso Robelo, and Moises
Hassan. Violetta de Chamorro is no
longer a member of the junta, and
Alfonso Robelo is in exile in Costa Rica,
where he is an outspoken critic of the
junta of which he was once a member.

Commitment Number One-
Human Rights

"... |()]ur firm intention to establish
full respect for human rights. ..."

Nothing has demonstrated the
callous disregard of human rights by the
Sandinista regime so much as their
treatment of the Miskito Indians. Ap-
proximately 20,000 Miskitos— one-third
of the entire Miskito population— have
crossed the border into neighboring
Honduras thus far, where they live in
refugee camps. They have been victims
of the Sandinistas' constant campaigns
against them.

It all began with efforts by the San-
dinista government to try to force the
Miskitos into adapting their way of life
to a preconceived Sandinista model.
Many of these human rights offenses are
detailed in a report just released by the
OAS General Assembly on June 4
transmitting a report by the Inter-
American Human Rights Commission
dated November 29, 1983.

Miskitos have been forcibly relocated
from their traditional villages. In a few
cases where they resisted, they were
killed. Many were force marched to the
new area and not allowed to take their
belongings with them. In other in-
stances, the government appropriated
their farm animals for itself. On
February IS, 1982, the Episcopal Con-
ference of Nicaragua, headed by
Managua's archbishop, directed a
message to the people and Government
of Nicaragua denouncing the human
rights violations against the Miskitos.

The Miskito Indians long ago
adopted the Moravian Church as their
primary religious institution. The San-
dinistas have harassed the Moravian
Church, calling some of its ministers
"counterrevolutionaries." They have been
asked to change their sermons into
vehicles of support for the Sandinista
revolution. Church services have been
interrupted by Sandinista troops looking

i called count em .< ilutionarii <
Moravian hospital, the only one serving

confiscated by the g< > | and

turned into a military headquarters, ac-
cording to the Miskitos. Many Moravian
pastors— out of fear, frustration, or
both— have taken refuge in Honduras.
Amnesty International, an organization
which was highly critical of the previous
regime, denounced the Sandinistas in
September 1983 for this sort of
behavior.

Miskito organizations say their
villages have occasionally been bombed
by Sandinista planes. Efforts have been
made to force them to join the San-
dinista militia.

Presumably for security reasons,
some Miskitos who were ocean
fishermen have been prohibited from
fishing, cutting off their livelihood and
their principal source of food.

The Miskitos had always maintained
their land as communal property of the
tribe. The Sandinistas have broken up
some of these communal holdings, mak-
ing them property of the state.

Smaller tribes, such as the Sumo
and the Rama, have also suffered similar
violations of their human rights at the
hands of this so-called peoples' govern-
ment.

But by no means have human rights
violations been limited to indigenous
peoples. As you will recall, the Pope, on
his visit to Managua, was treated with
unheard-of rudeness. Sandinista
militants set up a parallel loudspeaker
system over which they heckled the
Pope and attempted to drown out his
sermon. Most of the areas close to the
Pope were assigned to these militants,
and ordinary Catholics who turned out
to receive the Pope's blessings were kept
at a distance.

This is a fitting illustration of how
the Sandinista government has treated
the Catholic Church.

Another example has occurred in re-
cent days with the expulsion of 10
foreign priests from Nicaragua. The
ostensible excuse for their expulsion was
that they somehow had something to do
with a protest demonstration against the
house arrest of yet another priest,
Father Luis Amado Pena. But a majori-
ty of them were not even at the
demonstration in question, which, at any
rale, was a peaceful demonstration led
by the country's archbishop, the sort of
a demonstration which would be routine-
ly permitted in any truly democratic
country.

The Pope, in commenting on tins ac-
tion, said: "I ask the Lord to illuminate
the minds of those responsible so that
maj reversi this decision, openly

harmful to the church and the needs of
the Catholic population of Nicaragua."!

In recent years, the Archbishop oi
Managua, Monsignor Obando y Bravo,j
has not been able to have the tradition!
holy week services broadcast on radio ,
and television because the governments
wanted to subject the process to priorj
censorship, a demand to which the Aim
bishop understandably refused to ac- i
cede. In a crude ploy, a priest, who is 4
the spokesman for the archbishop and!
director of the Catholic radio station,
was accused of having sexual relations
with the wife of another man, stripped
naked, and paraded in public where Sat
dinista mobs jeered at him while govM
ment press photographers and televisia
crews, which "just happened" to be onl
the scene, took pictures. The program!
ming of the Catholic Church's radio sta-
tion has been severely restricted. All
Marxist-Leninist governments eventual
reveal themselves as atheistic — even
though in the case of Nicaragua, a lew
misguided priests hold high government
positions — and these governments use
their institutions to promote atheism. »

The Sandinistas have attempted tJJ
infiltrate Catholic youth groups, and j
when this largely failed, they set up
their own so-called "peoples' church." Ii
November of 1983, all Nicaraguan
churches closed for a day in protest
against attacks by Sandinista youth
mobs on numerous churches.

The Nicaraguan Permanent Comna
tee on Human Rights has itself been tl
victim of Sandinista government ex- ,
cesses. The former president of the cot
mission, Jose Esteban Gonzalez, made
trip to Italy in 1981 where he denounci
the existence of political prisoners in i
Nicaragua. On his return to Managua,;
number of supporters and colleagues
came to the airport to receive him. Th«
were never allowed to get near him hit
instead were roughed up and spat upoi
by Sandinista mobs. Only the presence
of the Venezuelan Ambassador
prevented Gonzalez himself from get til
roughed up, but he was arrested a wee
later anyway.

The current president of the
Nicaraguan human rights group, Mart*
Patricia Baltodano, told the Inter-
American Human Rights Commission i
May of this year that Sandinista laws
have institutionalized the violation of
human rights. The setting up of so-eall
Neighborhood Committees for the
Defense of the Revolution are really at
tempts to limit the freedom of the in-
dividual Nicaraguan by instituting a co
trol system over the population at the
neighborhood level.

Department of State Bullet

WESTERN HEMISPHERE

'reedom of the press also suffers in
|ragua. The only independent
^paper, La Prensa, has had its
ication suspended by the govern-
on numerous occasions and is sub-
;o prior censorship. On countless
the paper has been so heavily cen-
d that its editors decided not to
ish.

\ recent example of this happened
10 when La Prensa attempted to
rt on the expulsion of the 10 priests,
icident which I have already dis-
ed. Three items— one reporting on
government's cancellation of their
lency permits, another on Catholics
emning the expulsion, and a third
le fact that they were allowed to
; carrying only the clothes they

were censored. Therefore, the
>rs decided they could not print the
on for that day.

The lack of the right for families to
rmine how their children will be
ated, which we in the United States
ider a fundamental human right,
Deen denounced by the Nicaraguan
•nts' Association. The Sandinista
rnment tries to use education to
rwash the young against the ideals
eir parents and even to get them to
'Unce their parents' lack of revolu-
iry zeal to the authorities in some
5. Intellectual freedom and the
lorn to belong to independent labor
:ns are also restricted in today's
•ii ragua.

] The human rights of farmers have
■ ;red from Sandinista agricultural
9 ies. The so-called Economic and
o il Emergency Law decreed in late
• has made the state the only pur-
It er of farm products. Thus, the
Jier can only sell his produce to the

0 'rnment and only at the govern-

nt t's price. Many small farmers have
4 1 ruined by this policy, and
J .ragua must now import some foods
•y hich it was previously self-sufficient.
\| he same time, a large bureaucracy
<| been established in order to control
J ctivities of the populace, soaking up
m ey which would normally be
.liable for investment in agriculture,
in the newspaper Nuevo Diario has
•J plained about the amount of money
ill 1 to support the bloated Sandinista
;aucracy. All of the foregoing
.onstrates that the commitment to
. our firm intention to establish full
iect for human rights. ..." has thus

1 i been grossly violated.

Commitment Number Two-
Civil Justice

Let us turn our attention to the second
Sandinista commitment to " . . . let
justice prevail for the first time in half a
century. ..."

Presumably, the Nicaraguan
Supreme Court, under the original San-
dinista plans, was supposed to have com-
plete autonomy in the judicial area, and
lower courts would be dependencies of
it. The Inter- American Human Rights
Commission in 1981, as well as an inter-
national commission of jurists, said that
the judicial branch in Nicaragua should
be independent from the legislative and
executive branches of the government,
not to mention the Sandinista party.
But, in reality, other courts have
been established which have nothing to
do with the concept of judicial independ-
ence as we know it. The Supreme Court
has no authority over them. One of them
is the so-called Peoples' Court at the
neighborhood level. These courts spend
their time ferreting out so-called
counterrevolutionaries in the neighbor-
hood. For example, a neighbor who does
not show up for a meeting to promote
the Sandinista cause may find himself
labeled a counterrevolutionary by one of
these courts.

The right of habeus corpus in
Nicaragua must be questioned. As in
Cuba, people who have been jailed for
so-called political crimes are often not
released when their sentences have been
served. New judges owe their jobs to the
Sandinistas and are not about to show
any independence on the bench.

There exists no constitution, as such.
There was the Economic and Social
Emergency Law of 1981 which in 1982
became the State of Emergency. This
State of Emergency has been routinely
extended every time it was about to ex-
pire. Under this system, all laws are
issued by government decree. The State
of Emergency does not provide for the
right of the individual to a defense in a
court of law in some cases and in others
suspends the civil rights of the in-
dividual. This has been denounced by
Amnesty International.

Commitment Number
Three— Elections

So much for Sandinista justice. Let's
turn now to commitment number three,
dealing with elections.

We see that elections have been
scheduled by the Sandinista government
for November 4 of this year, 2 days
before our own. As we once had high

hopes for the new Nicaraguan Govern-
ment 5 years ago, can we now have high
hopes that at least this commitment will
be fulfilled? This is, in itself, a welcome
development, but there are some dis-
turbing statements on the record which
lead one to question just how open this
election process will be. In the letter of
July 12, 1979, the Sandinista leaders
committed to the OAS to "call
Nicaragua to the first free elections our
country will have in this century." This
was in reply to the resolution of the 17th
Meeting of Consultation of the Ministers
of Foreign Affairs which had said free
elections should be held as soon as possi-
ble, leading to the establishment of "a
truly democratic government that
guarantees peace, freedom and justice."

Yet on August 25, 1981, Com-
mander Humberto Ortega said that elec-
tions would not be to contest power but
to strengthen the revolution. On July 7
of this year, less than 2 weeks ago,
Commander Carlos Nunez Tellez said on
Radio Sandino:

The electoral process is the result of a
political decision made by the FSLN [San-
dinista National Liberation Front], its revolu-
tionary leaders, and the government to rein-
force the historical popular plan. There is
nothing more alien to the electoral process
than sectarianism, dogmatism, and other
vices that are characteristic of certain so-
called democracies.

Elections in Guatemala

WHITE HOUSE STATEMENT,
JULY 4, 19841

We have noted with pleasure the record
turnout of Guatemalan voters in the
July 1 Constituent Assembly elections.
The bipartisan U.S. observer team and
our Embassy in Guatemala report from
visits throughout the country that the
process was fair and open, well orga-
nized, and orderly. We applaud the
Government of Guatemala for taking
this important step in carrying out its
commitment for a return to constitu-
tional practices and the unprecedented
response of the citizenry to the oppor-
tunity to participate in their political
process. We wish the Guatemalans well
as they prepare a constitution and pro-
ceed with elections for a new govern-
ment next year.

•Text from Weekly Compilation of
Presidential Documents of July 9, 1984.

*ltember1984

WESTERN HEMISPHERE

Go\ esmen have said in

.nlj two type
Sandinistas and counter-
Doe that mean thai

and voters for other parties
will automatically be labeled counter
revolutionaries'.' And what kind of treat
ment will tl them to receive on

if the government?

The neighborhood control commit-
Sandinista Defense Com-
mittees. They have set up an informer
nodeled on the East German
plan and with East German agents con-
trolling their internal security. They
have the power to deprive a citizen of
his food ration card, for example — a
card, by the way, which was never
needed in Nicaragua until this govern-
ment came along. These Sandinista De-
fense Committees also control access to
cl Is, medicine, and health care.

It is also worrisome that the army is
called the Sandinista Army, and other
branches of t he armed forces are simi-
larly named. Thus, the security forces
are intimately linked with one of the
political parties which will be running in
the elections — the Sandinista party.

The electoral council which has been
set up is made up exclusively of promi-
nent members of the Sandinista party.
Will they he fair to the opposition par-
t ies?

And will the state of emergency he
lifted for the elections?

Will the opposition parties he able to
campaign without interference by
authorities or by Sandinista-sponsored
\ out h mol

Will opposition parties have equal
access to radio and television as com
I with thi' Sandinista party? Will
thej be able to have party represen-
tatives at the polls?

Will the Sandinistas allow interna-
observers to move freely about
untry during the election process?
How will the ballots he counted and how
Will results ho relaxed to election In iad-

quart

We also note that, as time has gone
on. the government has arbitrarily con
ind more power m the
at h taparl Wha

is now the Sandinista
i rnment.
■> this proi

to he I

election in November just bel
own general assembly?

We have seen how the Sandinistas
of Nicaragua have thus far failed to live
up to their commitments to the OAS of
5 years ago. It is a shame that the peo-
ple of Nicaragua, so hopeful in 1979 that
their situation would improve, have seen
their revolution betrayed by a group of
leaders who have aligned themselves
with international communism and
whose principal concern has been to
maintain themselves in power and, in-
deed, to export communism to their
neighbors virtually from the day they
took over. We in the OAS, which was
deeply involved in the process by which

the Sandinistas took power, have a
grave responsibility to monitor the
fulfillment of these commitments.

In June 1979 a respected scholar ■
Latin America, Dr. Constantine Menge
wrote: "The defeat of the Somoza Arm.
by the Sandinistas will be followed byl
Cuban-type process from which the pre
Castro guerrilla leaders will emerge al
the only group with real power." Five
years after he wrote this, and 5 years
after the Sandinistas' commitments to
the OAS, it developed that he was pro-
phetic. ■

President Meets With
El Salvador's President

WHITE HOUSE STATEMENT,
JULY 23, 19841

During his brief visit to Washington to-
day, El Salvador's President Jose
Napoleon Duarte met with President
Reagan this morning at 11:00 for half an
hour, with the Vice President present.
From the State Department, the
meeting included Secretary Shultz and
U.S. Ambassador to El Salvador
Thomas Pickering.

Following his meeting with Presi-
dent Reagan, President Duarte went to
the Hill to meet with House Majority
Leader James Wright. We believe he
was also seeing Jamie Whitten, chair-
man of the Appropriations Committee;
and Clarence Long, chairman of the
Foreign Operations Subcommittee of the
Appropriations Committee; and possibly
others.

Following his meeting on the Hill,
President Duarte was to return to New
York City. He's there for meetings with
UN officials, the Americas Society, and
others.

President Duarte gave a full readout
of the meeting, discussing his assess-
ment of developments in El Salvador,
his very successful trip to Europe, and
the Administration's efforts during the
current 3-week congressional session to
secure pending FY 1984 supplemental
funds and complete congressional action
hi the Central American Democracy,
Peace, and Development Initiative. We
have nothing to add to what he said.

As you know, we still hope to secure
that portion of the FY 1984 supplemen-
tal request which has not been acted on
(for El Salvador this includes $134

million in economic assistance and $117
million in military assistance) and the
Central America Democracy, Peace, m
Development Initiative plan request ft}
all of Central America which includes
for FY 1985 $1,376 billion ($1.12 billiot
in economic and $256 million in militar
assistance for the region). Of the $1.3fi
billion requested, $473.6 million would
be for El Salvador— $341.1 million
would be for economic assistance and '
$132.5 million would be for military '
assistance.

The Administration in February re«
quested a supplemental appropriation c
$659 million to begin meeting the most
urgent needs identified by the National
Bipartisan Commission on Central
America; $312.7 million in the FY 1984
Supplemental ($134 million in economic
and $178.7 million in military assistanc
is for El Salvador.

As you know, some $61.7 million in
urgently needed military assistance for
El Salvador was passed by the Con- |
gress. The remaining $117 million in
military assistance and $134 million in
economic assistance have not been acte
upon and, at this point, are both urgeir
ly needed by the Government of El
Salvador, as are the $266 million in
economic assistance and $142 million ir
military assistance requested in
February for other countries in Centra
America.

We will be striving for House actii
on our requests for the Henry Jackson
plan and the supplemental funds for El
Salvador.

■Text from White House press
release. ■

WESTERN HEMISPHERE

Ijba as a Model and a Challenge

ffenneth N. Skoug, Jr.

w^ddress to the Americas Society
jew York City on July 25, 198A.
\Skoug is Director of the Office of
mn Affairs, Bureau oflnter-
rican Affairs.

iradoxical Neighbor

i neighbor Cuba is a country of
Jdoxes.

• It is a small island, but it has the
gn policy and the military establish-
; of a major power, committed by
leepest instincts of its leadership to

• 'cting its system and its point of

abroad.

■ Although it strives unceasingly for
;rship of the Nonaligned Movement,
l is more closely aligned with the
it Union than many members of the
saw Pact, providing unique military
ces in kind in return for economic
nilitary assistance.

It has, especially in recent years,
ne an avowed advocate of Latin
rican unity, but it has a history of
vention in the region and maintains

ties to subversive forces in every

1 American country.

Its economy literally lives off
ive infusion of foreign aid, but it
:sents itself as a development model
thers.
Its leaders sometimes assert that
ifi welcome democratic trends per-
» d in the hemisphere, but there is
il infortunately not the remotest
'f :tion of such a trend in Cuba itself.

)ut of these ingredients there has
H ged a, so far, durable mixture of
ie raditional Latin American caudillo
lj he 20th century European concept
:'|e party-state. The pyramidal Cuban
a Tship remains dedicated to its own
4 igly held concept of world revolu-
4 asserting its independence of, but
a asingly dependent on and con-
■ ned by its bonds to, the U.S.S.R. It
( eadership disquieted by the apathy
sometimes active dissent of its own
■ns but unwilling or unable to
ge its fundamental approach. It re-
s committed to projecting itself as a
model for others. It sends its sons
jht and die thousands of miles from

2 in the name of proletarian interna-

• ilism. It funds, arms, trains, and
sels revolution but craves recogni-

( as a proponent of a stable interna-
j d order.

Cuba wields influence far beyond its
size though perhaps still beneath the
aspirations of its leaders. Its human
resources are impressive. We need to
look carefully at the model it projects
and the challenge which it poses for us
in Latin America and the Caribbean.
For the leadership of revolutionary
Cuba, "Nuestra America" starts at the
Rio Grande and ends on Tierra del
Fuego. Its target is this immense
region, from which Cuba would like
to dispel U.S. influence or at least
diminish it.

Cuba's leadership, which has
changed surprisingly little in composi-
tion over the past quarter century, came
to power with two quintessential objec-
tives. It wanted to maintain power in
Cuba itself while effecting a thorough-
going social transformation, whatever
the cost. And it wanted to carry the
revolutionary struggle abroad to the
Caribbean, to Central America, to South
America, and even to Africa. Whatever
the price in human suffering, no one can
question the determination with which
each of these two basic objectives has
been pursued by Cuba's leaders down to
the present day.

There has been from the outset a
third motivation, an apparently visceral
animosity for the United States. To the
extent that this was calculated, it was
perhaps because it was thought that the
achievement of the two primary objec-
tives would inevitably bring the Cuban
revolutionaries into conflict on both
counts with American power. To the ex-
tent that it was irrational, it has been
even harder to address. In June 1958
the Cuban "Maximum Leader" wrote
from the Sierra Maestra to a confidante
that after the revolution had come to
power, he would begin a longer, larger
war against the Americans. He told her
he had come to understand that this was
his true destiny. It would be a serious
mistake to regard this as rhetorical. It is
among the most prized memorabilia of
the Cuban revolution. After a quarter
century it still seems to be valid.

The Cuban-Soviet relationship,
which is now so fundamental, is derived
from these motivations and logical only
in light of revolutionary Cuba's own ob-
jectives. The intent of the revolutionary
leadership in Havana to confront the
United States in Cuba and abroad in
pursuit of its twin objectives led natural-

ember 1984

ly and even inevitably to the decision to
invite the Soviet Union to the Western
Hemisphere. From the standpoint of the
Cuban leadership, the U.S.S.R. was and
is a necessary evil. Moscow had its own
reasons for accepting Cuba's invitation.
The course of this relationship has not
always been smooth, especially at the
outset, but it has evolved into a sym-
biotic one, where each is essential to and
derives unique benefits from the other.
As the mutual costs have risen, so have
the perceived benefits. Like the two
basic objectives and the anti- American
bias, the Soviet connection has been cen-
tral to the evolution of Cuba's domestic
and foreign policies alike. It is as much
of the fabric of today's Cuba as the
Sierra Maestra. And it is instructive
that Cuba's relationship with the Soviet
Union — once it began — has been largely
unaffected by any changes or trends in
U.S. -Cuban relations, including tem-
porary thaws in the relationship between
Washington and Havana.

The basic conflict in U.S. -Cuban
relations that began in 1959 stems
primarily from Havana's foreign policy
and only indirectly from events in Cuba.
It is true that at the outset our attention
and expectations were directed mainly
to certain domestic actions by the
Castro government, such as expropria-
tion of U.S. property, execution of
prisoners, and the unforeseen introduc-
tion of the communist system, stimu-
lating massive flows of refugees to our
shores. It would at present be quite con-
ceivable, in theory at least, for Cuba to
have a repressive domestic system and
yet not promote turmoil in the region or
align itself militarily with the rival global
superpower. If Cuban foreign policy
were really noninterventionist and non-
aligned, Cuban-American relations
would still be less than harmonious, but
such a Cuba would not clash with U.S.
foreign policy interests throughout the
region.

In historical practice, the foreign
and the domestic policies of the Cuban
Government, however, spring from the
same imperative. Cuba still sees a mis-
sion and arrogates to itself the right and
even the duty to support revolution and
"national liberation" in other states.
When conditions are deemed appropri-
ate, the Cuban revolution is a model for
others. It is not passive. Cuba craves
emulation. The model need not, of
course, be accepted in every detail. The
Cubans have grown aware through trial
and error that conditions differ from
country to country. Doubtlessly with an
eye both to their own experience and to
their privileged access to the Soviet

WESTERN HEMISPHERE

treasury, they caution radical regimes in
third countries to keep their lines open
Western trade and assistance and not
■ propriate too quickly all private
enterprise or to alienate or eliminate all
other institutions. But these have been
essentially prudent tactical considera-
. designed to ensure the survival
and firm implementation of a one-party
state system in third countries, such as
Nicaragua and Grenada, based on well-
known Leninist principles. The Cuban
leadership envisions the rise of societies
imitative of Cuban practice, alienated
from the United States, friendly to the
U.S.S.R., and looking to Cuba for
ideological leadership. In the short run,
however, where societies are not yet
ripe for revolution, Cuba is content to
use its power to encourage other states,
particularly in Latin America, to rally
together against the United States.

The Cuban Model in
Appearance and Reality

Since Cuba proselytizes, we need to
know what it is, and, perhaps more im-
portant, what it seems to be. Cuba of-
fers would-be leaders in other countries
the example of a hierarchical one-party
system, supported by ubiquitous organs
of control and punishment and by a near
total monopoly over the dissemination of
knowledge and ideas. It offers to would-
be emulators a command economy which
assigns nearly everyone some form of
employment, at least if it wishes them to
be employed. The fact that the economy
does not respond well to the needs of
the population, that it is a perpetuation
of monoculture and closely integrated in-
to and totally dependent on subsidies
from the Soviet orbit is not always
readily apparent to others. For domestic
support the model relies heavily and suc-
cessfully on national consciousness-
building enterprises like nationalized
sport and culture. It appeals to visceral
nationalism by calculated distortion of
past history and contemporary events.
Revolutionary Cuba has long assigned
the United States the same universal
malevolence which Hitler arrogated to
lews. It pretends to, and to a cer-
tain degree practices, a more egalitarian
distribution o ial product than is

customary in Latin America. It lays
great stress on so-< alist

achievements, particularly in health and
education. In this respect — as with
many others, too — Cuba distorts and
littles the achievements of the past so
1 rove the appearance of the pre-
I iba "ffers to pro-
E radical change a model for

seizing and holding power without need
for periodic popular ratification and for
altering society unrestrained by legal or
ethical limitations.

There is one essential element of the
Cuban model which could not be widely
replicated. Cuba's economy could not ex-
ist but for Soviet subsidies. These are on
the order of $12-$13 million dollars
daily for economic aid alone. Thus those
who might wish to emulate the Cuban
experience cannot truly do so unless
they can persuade the Soviet Union to
provide a similar degree of massive sup-
port.

Moreover, the Cuban reality is some-
what different from the point of view of
those who must live it. The costs are
very high. The benefits are less evident.
The Cuban system since 1959 has been
one-man rule. The same individual is
now President of the Council of State,
President of the Council of Ministers,
First Secretary of the Cuban Communist
Party, and Commander in Chief of the
Armed Forces. The "Maximum Leader"
projects his views across all aspects of
Cuban society. From bovine genetics to
college textbooks, from sugar cultivation
to nurses' uniforms his views are norma-
tive. To challenge them, even to provide
well-intended advice, is not recom-
mended. Unsurprisingly, in these cir-
cumstances innovation does not flourish
in Cuba and practices are slow to
change.

Second, Cuba is a militarized society
with one-quarter million men under
arms and another million men and
women in the militia. In addition, as
Havana International Radio recently
stated, every able-bodied Cuban must
know his mission in a war situation. The
economy, it stated, ". . . is being pre-
pared so it can accomplish its objectives
in times of war and adapt its develop-
ment to defense interests." Militant
Cuba devotes its Sundays neither to the
spirit nor to rest nor to recreation but
rather to military drill. Cuba possesses
the most experienced and most highly
mechanized fighting force in Latin
America. Its leaders speak often of the
need to defend Cuba, but Cuba's
substantial combat experience has been
acquired almost exclusively on far away
foreign battlefields such as Bolivia,
Angola, Grenada, and the Horn of
A I'rica. As Cuban Politburo member
Jorge Risquet described it recently
(Havana International Service, June 15,
1984) when he decorated Cuba's "inter-
nationalists": "You have traveled
thousands of miles from your fatherland,
your homes, and your families to raise
the Cuban and internationalist flags in
the heart of Africa."

The essence of Cuba's political
organization is reflected in Article 61 o, ,
the Constitution of Cuba of 1976,
according to which:

None of the freedoms which are recogl
nized for citizens may be exercised contrary
to what is established in the Constitution ai
the law, or contrary to the existence and ob
jectives of the socialist state, or contrary U
the decision of the Cuban people to build
socialism and communism. Violation of this
principle is punishable by law.

This last is understatement. No o||
ganizations or movements are permittt
in Cuba to oppose the political will of to
leadership. There is no organized dis-
sent, no effective institutional or
historical limitations on the exercise of
power. No parties other than the Com-
munist Party are tolerated. There is nt
freedom of the press or speech, no real
possibility through culture or the in-
tellectual arts to satirize the leadershij
The Catholic Church and Protestant
churches exist but cannot provide a riv?
orientation or challenge the dictum of
Article 61. It is not surprising that the
"Seventh Report of the Organization oi
American States on the Situation of
Human Rights in Cuba," published last
October, concluded that the structure <
the Cuban state is totalitarian.

Over 1 million refugees since 1958*
have found the way out of Cuba to ob)<
shores, especially to the United States.
Less fortunate has been the fate of
those who stayed behind but who soug*
to resist the party-state. The Cuban
leadership has singled them out for ex
emplary punishment. Vengeance is wit
lenting on those who dare to resist the
system. Nowhere else in Latin Americ
have so many been punished so long.
There are still in Cuba, at present, hui
dreds of prisoners who have spent mot
than 15 or even 20 years in prison
because they opposed the regime and
refuse to acknowledge their "crime" ar
accept the new order. Like the recentl
released poets Jorge Vails and Armani
Valladares, they have passed the best
years of their lives free in spirit but lo;
to the world.

Despite these punishments and
despite the evident will and capacity Oi
the regime to deal harshly with dissent
it continues to manifest itself. In
January of 1983, for example, we
learned of the trials and sentencing—
some originally to death— of a group c
some 50 Cubans who apparently wishe
to form a trade union on the model of
the Polish Solidarity. Arrests and trial
of their lawyers and judges followed.
After that, the former President of |

Department of State B u I lei

WESTERN HEMISPHERE

■

and, at the time, Minister of
e, Oswaldo Dorticos, committed
e. The veil of secrecy that sur-
s Cuba makes it difficult to obtain
le information about dissent and
ters, but we know enough to con-
that the spirit of freedom still ex-
1 Cuba.

is clear that whatever Cuba has
iced since 1959 has been wrought
price of inordinate human suffer-
>ut what has, in fact, been pro-
which could justify this regime?
he Cuban revolutionaries took

talking about an end to mono-
•e and to foreign domination of the
i economy. They spoke of economic
;h and egalitarian living standards.
34 Cuba is more dependent on
than before. In 1983 more than
>f Cuban trade was with the Soviet
i and other communist countries
nly some 10% with the West. Were
r i for subsidized Soviet purchases of
l sugar and subsidized Soviet oil
along with deliveries of Soviet and
European equipment, the Cuban
ijmy could not function. Even so,
r : ipita economic growth in Cuba has
ej imong the lowest in the
W phere. It is often forgotten that
ib on the eve of Fidel Castro was a
*l ' advanced society. In 1952 Cuba
d; le third highest per capita gross
d ial product of the 20 Latin
;i ican republics. In 1981 it ranked
ti Only in the equalization of living
ur ards have the aspirations of the
lit l revolutionaries been reached to
rr degree, albeit at a modest level.
.1 so the elite has perquisites denied
t • great majority. For example,
te Cuba— which rations clothing to its
.T itizens — recently staged an inter-
ti lal fashion fair, the Cuban authori-
■» xplained that the "fashions" would
i ■ export or sale in "specialized"
yk i open to diplomats and tourists.
ic did not explain that the Cuban
((buys in such stores, too, and that
* I >thing is not always made in Cuba
e "socialist camp."
| /Me leading the Cuban delegation
! June 1984 CEMA [Council for
al Economic Assistance] summit
ng in Moscow, Cuban Vice Presi-
Carlos Rafael Rodriguez cited
, Mongolia, and Vietnam as the
; developed countries within
A." For Cuba, which in 1959 had a
ard of living that rivaled Spain, it
i bizarre sign of progress to be
fied with Mongolia and Vietnam
o see accentuated those programs
i promise to perpetuate Cuba's
lation.

|3mber1984

Cuba— A Profile

Gulf
of Mexico

UNITED
STATES

$ \ BAHAMAS

CUBA

PROFILE

People

Noun and adjective: Cuban(s). Population
(1981 census, preliminary data): 9.7 million;
67% urban, 30% rural. Avg. annual growth
rate: 1.2%. Density: 86/sq. km. (224/sq. mi.).
Ethnic group: Spanish African mixture.
Language: Spanish. Literacy rate: 96% of
physically fit between ages 10 and 49.
Health: Infant mortality rate — slightly less
than 25/1,000. Life expectancy— 70 yrs.
Work force: Agriculture — 30%. Industry
and commerce — 45%. Services — 20%.
Government — 5%.

Geography

Area: 114,471 sq. km. (44,200 sq. mi.); about
the size of Pennsylvania. Cities: Capital —
Havana (pop. 1.9 million). Other cities — San-
tiago de Cuba, Camaguey. Terrain: Flat or
gently rolling plains, mountains up to
1,800 m. (6,000 ft.), and hills. Climate:
Tropical; avg. annual temperature 24CC
(76°F).

Government

Type: Communist state. Independence:
May 20, 1902. Latest constitution: 1976.

Branches: Executive — president, Council
of Ministers. Legislative — National Assembly
of People's Government, headed by Council of
State. Judicial — subordinate to Council of
State.

Political party: Communist Party (PCC).
Suffrage: All citizens aged 16 and older, ex-
cept those who have applied for permanent
emigration. National elections were held in
1976 for the National Assembly of the Peo-
ple's Government, and municipal elections for
local assemblies were held in 1981.

Administrative subdivisions: 14 prov-
inces, 169 municipalities.

National holidays: Jan. 1, Revolution
Day; May 1, International Workers Day;
July 26, Moncada Barracks Attack anniver-
sary.

Flag: White star centered on red
equilateral triangle at staff side, 3 blue and 2
white horizontal stripes in the background.

Economy

GNP (1979 est.): $9-11 billion. Annual
growth rate (1980 est.): -1%/ + 1%. Per
capita income (1981 est.): $900-$l,100.

Natural resources: Metals, primarily
nickel.

Agriculture: Sugar, tobacco, coffee,
citrus and tropical fruits, rice, beans, meat,
vegetables.

Major industries (17% of labor force):
Refined sugar, metals. Other industries: Oil
refining, cement, electric power, food proc-
essing, light consumer and industrial prod-
ucts.

Trade: Exports— $4.7 billion (f.o.b. 1981):
sugar and its byproducts (83%), nickel oxide
and sulfide (10%), tobacco and its products,
fish, rum, fruits. Major markets — USSR,
Eastern Europe, China. Imports — $5.4 billion
(c.i.f. 1980 approx. figures): capital equip-
ment (33%), raw materials (33%), petroleum
(10%), foodstuffs and consumer products
(20%-25%). Major sources— USSR, Eastern
Europe.

Official exchange rate: 1 Cuban
peso = US$1.28.

Membership in International
Organizations

JN and various specialized agencies, in-
cluding General Agreement on Tariffs and
Trade; Council for Mutual Economic
Assistance (CEMA); observer, Economic
Commission for Latin America (ECLA); In-
ternational Sugar Council; Pan American
Health Organization (PAHO); nonpartici-
pating member, Organization of American
States (OAS) and Inter-American Develop-
ment Bank (IDB); Latin American Economic
System (SELA); Group of 77; Nonaligned
Movement.

Taken from the Background Notes of April
1983, published by the Bureau of Public Af-
fairs, Department of State. Editor: J. Darnell
Adams. ■

WESTERN HEMISPHERE

Cubans are still rationed to three-
quarters of a pound of meat per person

ii 9-11 days. There recently have ap-
boards in Havana admonish-
ipulation to think not of con
sumption but of development. In other
words, perhaps, to think less of the fact
that a Cuban is entitled to a ration of
one pair of shoes a year and more of the
future development of the shoe industry.
But even the notion of industrial devel-

ient is belied by the facts. According
to the World Bank, manufactures ac-
counted for 5% of Cuba's exports in
1960 and the same percentage in 1980.
By way of contrast, Jamaica's went
from 5% to 53% in the same period,
Brazil's from 3% to 39%, Costa Rica's
from 5% to 34%, and Paraguay's from
0% to 12%.

The Cuban elite boasts of achieve-
ments in the fields of health and educa-
tion, speaking in terms of being a
"medical power" in the world. It is
beyond dispute that Cuba has health
facilities superior to those in many other
countries. But Cuba was a leader among
Latin American nations before 1959, in
part due to its close association with the
United States. The first great health
revolution in Cuba was introduced by
the United States in 1900. Havana and
yellow fever were synonymous in the
19th century. In 1900 there were 1,400
known cases of yellow fever in Havana.
In February 1901 William Gorgas com-
menced his campaign to eliminate the
disease. In 1901 there were 37 cases,
and in 1902 there was no yellow fever in
Havana. Deaths from malaria in 1900
were 325. In 1902 they were 77.

Cuba was a healthy country long
before it aspired to be a "medical
power." In 1960 it already had 1 physi-
cian for each 1 ,060 inhabitants — only
Argentina and Uruguay had more. In
1980 when Cuba had 700 inhabitants per
physician, Argentina and Uruguay had
530 and 540 respectively.

In L960 life expectancy in Cuba was
already 63 years. It gained 10 years to
73 by 1980. But in the same period
greater gains were made by nine Latin
American countries and similar ones by
three others. Infant mortality, according
to the 1977 Statistical Abstract of Latin
America, was 32 per 1,000 live births in

a in 1960. the best in the region and
better than Spain and Italy. In 1980 it
was 19. In the same period Jamaica had
gone down to 16. Percentage decreases
better than Cuba's 41% wen . d in

1 1 other states. As Professor Norman
Luxenburg of the University of Iowa has
wri: i in L958 I, id

ns for its 6.6 million inhabitants

(6,421) as the rest of the Caribbean
Basin had for 19 million. Even if Cuba
today does have the 15,000 doctors
which it claims, the rate of growth since
1958 is less than that between 1948
(3,100) and 1958 (6,421) when the
number doubled in 10 years.

In sum, the Cuban system may ap-
peal to certain would-be strongmen, but
it is not a successful development model.
It is a model, perhaps, for retention of
political and military power but not for
economic growth and human well-being.

However, the Cuban revolution has
another side, its foreign policy ac-
complishments. Here the record is more
complex. Cuba in the past decade has
finally gained some of the revolutionary
success which long eluded it after 1959.
Lacking freedom and economic progress
itself, Cuba has, nonetheless, grown into
a force which challenges the potential
development of the open society in Latin
America.

The Cuban Challenge

The revolutionary process that was suc-
cessful in Cuba was applied repeatedly
by Cuba to other states in the region
after 1959. In the beginning, expecta-
tions were simplistic, costs modest, and
results slim. Cuba viewed its neighbors
with hostility and as proper targets for
revolutionary bands. This interven-
tionary policy, which earned Cuba few
friends in the region and even strained
ties to Moscow, was put in abeyance
after the death of Che Guevara in
Bolivia in 1967. But the revolutionary
zeal of Cuba has continued as an in-
tegral part of the Cuban system. It is
anchored as Article 12(c) in the Cuban
Constitution. It has — in connection with
Cuba's more mature relationship with
the Soviet Union and its pretensions to
leadership in the Third World— become
a more sophisticated challenge to the
rival concept of the open society in the
Western Hemisphere.

Especially since the early 1970s,
Cuba has moved ever more definitively
into the Soviet sphere. In view of the
drastic change in the terms of trade be-
tween sugar and oil, the barter relation-
ship between Cuba and the Soviet Union
has become marked by increasing Soviet
subsidies and mounting Cuban economic
dependency. Cuba owes the Soviet
Union vast soft currency debts it cannot
repay. Indeed, the Soviet Union and its
Last European allies must supply
greater subsidies, expressed in un-
balanced trade accounts, to sustain
Cuba's economy.

But if Cuba, on the one hand, hai
creased in cost for the Soviet Union.fi
also has increased in strategic valuej
The decade of the 1970s witnessed ths
appearance of Cuban combat troops I
engaged on African battlefields. Parti
larly in the case of Ethiopia, this Cuij
presence served Soviet interests in al
way which no European ally of the I
U.S.S.R. could or would have done. I
Cuba's military success in Africa, at I
least in the short run, was in stark ca
trast to what had, until then, been al
tern of failure in Latin America. MoA
over, after its lonely endorsement of Ii
Soviet crushing of the Prague spring-
1968, Cuba has been unfailingly sup-j
portive of Soviet foreign policy, even!
when this allegiance has cost Cuba I
respect among countries which truly!
nonaligned.

At the end of the 1970s, when Cul
perceived new opportunities closer tffli
home, two vital elements had changed
from the situation prevailing in the I
1960s. For one, the Soviet Union was
now supportive of Cuba's renewed
revolutionary activism and was also I
prepared to underwrite the massive
buildup of the Cuban Armed Forces,
which has been taking place since the
end of 1980. This, together with Sovie
activities in and around Cuba, has in*
creased tensions and would be an ele-
ment in any major East-West conflict
The second factor is that Cuba has
learned to differentiate its own Latin
American policy objectives. In the Ion
run, probably, Cuba envisions transfo
mation along Marxist-Leninist lines ft'
every state in the region, but the Cub'
leadership has learned to order its sh(
range priorities. Cuba now has the op
tion of cultivating better diplomatic n
tions with the states of the region, tr;
ing thereby to stimulate a Latin
American consciousness against the
United States and to cultivate its own
general acceptance as a normal memb
of the international order.

Yet, anchored by its bonds to the
Soviet Union, Cuba maintains close re
tions with virtually every radical or
revolutionary group in the region, suf
plying training, money, weapons, and
counsel and providing the nexus be- j
tween the revolutionaries and the Sov
Union. At the same time, it assesses t
relative value of its associations with
various Latin American governments
and particularly the degree to which
these governments can be made usefu
to Cuba. Cuba thus seeks to be both t
mecca for subversives and a focal poii
for rallying their governments against
the United States.

Department of State Bulle'

WESTERN HEMISPHERE

pe examples of this situation in the
jare many.

In the case of Argentina, Cuba
haste to show its firm support of
til-then despised Galtieri regime
he battle for the Falklands began,
eology of the Argentine military
■ed the Cubans less than the
; to be seen in the forefront of
culture against the Anglo-Saxon,
ditional reward for Cuba has been
•nerous trade credits which both
gentine military regime and its
n successor have supplied to the
Cuban economy.

Once the momentum of the Falk-
issue was lost, Cuba — which was
abliged in August 1982 to ask
rn creditors to reschedule part of
-billion Cuban hard currency
-seized upon the general financial
in the region to promote Cuban
rity with other Latin American
-s. This, incidentally, shows again
dept Cuba is at exploiting even its
roblems for political gain.
In the case of Colombia, the
1 Government admitted having
d the M-19 revolutionaries who
ted the Turbay Ayala government,
vhich Havana was maintaining
y normal diplomatic relations.

{recently Cuba showed its influence
3w way. The head of the Cuban
'T nment requested that Colombian
T ists release the kidnapped brother
9 President of Colombia. The ter-
ra 5 heeded this request from an in-
/l ial whom they apparently respect
<J steem. The obvious lesson is that
i >ice which can stay the terrorist's
n can also permit it to strike.

The focus of Cuba's foreign policy,
* /er, is presently on Central
a ica. Cuba primarily wishes to see
3 andinista government in Managua
I lidated as a permanent force on
a merican mainland with its funda-
3 il approach in close harmony with
a uban system. Communist Cuba
tt 3 a communist Nicaragua. It also

■ 1 like to see the revolutionary
lis in El Salvador come to power
m through the process of a
■|:iated settlement, sharing power on
actional basis until Leninist-style

■ ol can be established. Cuba's im-
4ite attitude toward the other states

i region seems to be dictated
irily by how they react to the
;gle in Nicaragua and in El
idor. For example, it is largely ir-
ant to the Cubans that elections

take place in Guatemala. What is essen-
tial is that Guatemala stay out of the
conflict at its very door or else bear the
brunt of Cuban displeasure. The same
policy was followed in the case of Hon-
duras, where Cuban actions were keyed
to the stand taken by Honduras toward
the two conflicts on its borders. Cuba —
which has trained revolutionaries from
almost all countries in the hemisphere —
was able to send such forces into Hon-
duras. The invaders were defeated, but
they demonstrated the same principle as
applied in Colombia and elsewhere. The
government which displeases Cuba,
whether or not it has normal diplomatic
relations with Havana, can expect
armed retaliation.

Cuban officials occasionally say they
favor the democratic trend in Latin
America. But this putative endorsement
of something which Cuba has never per-
mitted its own people is suspect. Free
elections are clearly not seen by Cuba as
the answer to questions in Central
America or even as a useful step for-
ward. They are not likely to be seen as
relevant in other countries once there
exist concrete prospects for revolution
on the Cuban pattern. Rather, it appears
that Cuba, if it welcomes democratic
trends at all, does so only where it can
envision prospects of winning from
within or where the elected government
supports foreign policy objectives which,
at least in the short run, are consistent
with Cuba's own. In either case, how-
ever, there is no reason to believe that
Cuba will suspend its close ties to
revolutionary forces in any country,
forces which Cuba can help to bring to
power when conditions are appropriate
or which can be used as a threat to com-
pel or to persuade.

The United States and Cuba

The underlying issues between the
United States and Cuba have their
genesis in Cuba's revolutionary posture
and its close alignment with the Soviet
Union. Cuba has indicated on many oc-
casions that neither of these pillars of
Cuban policy is open to discussion. Its
behavior consistently underscores this
reality. It is Cuba's unique role as a
linchpin between Soviet power and a
Latin America in transition which intro-
duces strategic and ideological con-
siderations into conflicts which could
otherwise be resolved or at least
ameliorated on their own terms. Cuba
facilitates Soviet military power on our

Member 1984

doorstep. That is why foreign policy is
at the root of our differences with
Havana and why so much of our policy
toward Cuba is directed toward its
restraint.

In the 1970s there were good faith
efforts by the United States to improve
this relationship. Interests sections were
established to facilitate direct communi-
cations between the two parties. The
U.S. trade and financial embargo was
relaxed. Cuba released some political
prisoners and permitted the return of
Cuban-Americans who had left Cuba as
"worms" and came back as "butterflies,"
pouring dollars into Cuban coffers. But
this movement did not and could not
touch the main thrust of Cuban policy.
Having gone into Ethiopia in 1977 at
Soviet behest, Cuba in succeeding years
engaged itself in Nicaragua and El
Salvador and exploited the seizure of
power by the New JEWEL Movement
in Grenada. In so doing, Cuba demon-
strated the depth of its determination to
reconstruct the Western Hemisphere
along the lines of its own model.

The attitude of the U.S. Government
toward Cuba remains one of serious con-
cern about the militarization of Cuba
and about Cuba's stimulation of revolu-
tionary violence in this hemisphere and
elsewhere. After Grenada it is likely that
Cuba has some better appreciation of
the risks of uncontrolled violence and of
the limitations of its own power and that
of its allies, but there is no convincing
indication that the overall thrust of
Cuban foreign policy has been or will be
altered. Cuba remains militant and
prone to stimulate violent change.

There remains, however, a willing-
ness on our part to resolve those prob-
lems with Cuba which Cuba may wish to
resolve and for which there is a
reasonable basis for mutually satis-
factory solutions. One example is the
problem of the Mariel excludables who
came with the boatlift of 1980 and who
are ineligible to remain in the United
States for substantive reasons. We have
also tried to engage Cuba in talks about
problems of radio interference. In both
cases we were and are prepared to deal
with Cuba on the basis of equality and
mutual respect and to make concessions
in order to resolve problems. There are
perhaps other issues of this nature
where progress could be made if Cuba is
so interested.

It is occasionally asked if there can
be an improvement in overall U.S.-
Cuban relations. Such an improvement
can hardly be a goal in itself. There are
some bilateral issues, relatively free of

TREATIES

; . which can be re-
l. But the differences of principle
een the United States and Cuba are
und. There is unfortunately no sign
e Cuban leadership is recon-
sidering its own world view or is begin-
ning seriously to address those issues

set it apart from a region which is
:ng for greater freedom and eco-
nomic well-being.

Assuming that these circumstances
continue, we shall continue to work with

ndly natioi el the Cuban

challenge and to overcome it until that

when the constructive genius of
Cuba can be turned to the commonweal
of all who inhabit this hemisphere. ■

Current Actions

MULTILATERAL

Aviation, Civil

International air services transit agreement.
Signed at Chicago Dec. 7, 1944. Entered into
force .Ian. 20, 1945; for the U.S. Feb. 8.
1945. 59 Stat. 1693.
Acceptance deposited: Italy, June 27, 1984.

Bill of Lading

International convention for the unification of

certain rules relating to bills of lading and

protocol of signature. Done at Brussels

Aug. 25, 1924. Entered into force June 2,

1931; for the U.S. Dec. 29, 1937. 51 Stat.

233.

Denounced: I'.K. for Bermuda, British Virgin

Islands, Cayman Islands, Falkland Islands
and dependencies, Hong Kong, Montserrat,
and Turks and Caicos Islands, effective
Oct. 20, 1984.

Coffee

Internationa] coffee agreement 1983, with an-
nexes. Done at London Sept. 16, 1982.
Entered into force provisionally Oct. 1, 1983.
nsitcd: Togo, June 4, 1984.

Voces

sited Nigeria, May 31, 1984.

Commodities — Common Fund

Agreement establishing the Common Fund
for Commodities, with schedules. Done at
June 27, 19801

ed: Brazil. June 29, 1984.

Human Rights

national covenant on economic, social,
Ldopted at N'".\ York
Dec. 16, 1966. I

' ■

deposited: Cameroon, June

Judicial Procedure

Convention on the civil aspects of interna-
tional child abduction. Done at The Hague
Oct. 25, 1980. Entered into force Dec. 1,
1983.2

Extended: Canada to Province of New-
foundland, July 5, 1984.

Maritime Matters

Convention on the International Maritime

Organization. Signed at Geneva Mar. 6, 1948.

Entered into force Mar. 17, 1958. TIAS

4044.

Accession deposited: Vietnam, June 12, 1984

Prisoner Transfer

Convention on the transfer of sentenced per-
sons. Done at Strasbourg Mar. 21, 1983.
Signature: Italy Mar. 20, 1984.

Senate advice and consent to ratification:

June 28, 1984.

Ratified by the President: July 17, 1984.

Satellite Communications System

Agreement relating to INTELSAT, with an-
nexes. Done at Washington Aug. 20, 1971.
Entered into force Feb. 12. 1973. TIAS 7532.
Accession deposited: Malawi, July 17, 1984.

Operating agreeement relating to
INTELSAT, with annex. Done at
Washington Aug. 20, 1971. Entered into
force Feb. 12, 1973. TIAS 7532.
Signature: Department of Posts and Tele-
communications, Malawi, July 17, 1984.

Shipping

United Nations convention on the carriage of
goods by sea, 1978. Done at Hamburg Mar.
31, 1978. »
Ratification deposited: Hungary, July 5,

1984.

Slavery

Protocol amending the slavery convention
signed at Geneva on Sept. 25, 1926 (TS 778),
with annex. Done at New York Dec. 7, 1953.
Entered into force Dec. 7, 1953, for the Pro-
tocol, July 7, 1955, for annex to Protocol; for
the U.S. Mar. 7, 1956. TIAS 3532.

Supplementary convention on the abolition of
slavery, the slave trade, and institutions and
practices similar to slavery. Done at Geneva
Sept. 7, 1956. Entered into force Apr. 30,
1957; for the U.S. Dec. 6, 1967. TIAS 6418.
Accessions deposited: Cameroon, June 27,
1984.

Sugar

International sugar agreement, 1977, as ex-
tended. Done at Geneva Oct. 7, 1977.
Entered into force provisionally Jan. 1, 1978;
definitively Jan. 2, 1980. TIAS 9664, 10467.
Withdrawal: Bangladesh, effective June 23,
1984.

Terrorism

Convention on the prevention and punish-
ment of crimes against internationally pro-

tected persons, including diplomatic agentst
Adopted at New York Dec. 14, 1973.
Entered into force Feb. 20, 1977. TIAS 8EHi
Accession deposited: Greece, July 3, 1984ff

International covention against the taking t
hostages. Done at New York Dec. 17, 1979
Entered into force June 3, 1983. 2
Ratification deposited: Portugal, July 6, 19i

Trade

Agreement on implementation of art. VI of
GATT (antidumping). Done at Geneva Apr.
12, 1979. Entered into force Jan. 1, 1980.
TIAS 9650.

Agreement on import licensing procedures.
Done at Geneva Apr. 12, 1979. Entered int
force Jan. 1, 1980. TIAS 9788.
Acceptances deposited: Singapore, June 20,

1984.

UNIDO

Constitution of the UN Industrial Develop-
ment Organization, with annexes. Adopted
Vienna Apr. 8, 1979.1
Signature: Guyana, July 17, 1984.

Ratifications deposited: Guyana, Ireland, I

July 17, 1984.

Wheat

Food aid convention, 1980 (part of the Inte
national Wheat Agreement, 1971, as extent
ed (TIAS 7144). Done at Washington Mar.
11, 1980. Entered into force June 30, 1980
TIAS 10015.
Approval deposited: European Economic j

Community, July 23, 1984.

Women

Convention on the elimination of all forms
discrimination against women. Adopted at
New York Dec. 18, 1979. Entered into fort1
Sept. 3, 1981. 2
Accessions deposited: Liberia, July 17, 198*

Mauritius, July 9, 1984.

BILATERAL

Antigua and Barbuda

Agreement for the furnishing of commodity
and services in connection with the
peacekeeping force for Grenada. Effected!
exchange of notes at Bridgetown and St.
John's Nov. 30, 1983 and Jan. 27, 1984. '
Entered into force Jan. 27, 1984.

Australia

Agreement extending the agreement of Ocl
16. 1968 (TIAS 6589). relating to scientific
and technical cooperation. Effected by ex-|
change of notes at Canberra Apr. 16 and I
May 11, 1984. Entered into force May 11,1
1984; effective Apr. 16, 1984.

Canada

Convention with respect to taxes on ineorm
and capital, with related exchange of notes.
Signed at Washington Sept. 26. 1980.

Department of State Bullet

TREATIES

col with related notes. Signed at Ottawa

1983. Second protocol. Signed at
jington Mar. 28, 1984.
|e advice and consent to ratification:

28, 1984.

ed by the President: July 16, 1984.

y relating to the Skagit River, Ross
and the Seven Mile Reservoir on the
d'Oreille River, with annex. Signed at
ington Apr. 2, 1984.
e advice and consent to ratification:

28, 1984.

ment regarding mutual assistance and
ration between customs administrations,
d at Quebec June 20, 1984. Enters into
upon exchange of diplomatic notes in

the parties notify each other of the
etion of any procedures required by
national law for giving effect to this
ment.

ment relating to the operation of radio
tone stations. Signed at Ottawa Nov.
[169. Entered into force July 24, 1970.
6931.
cation of termination: May 8, 1984;

ive Nov. 7, 1984.

ibia

randum of understanding for scientific
?chnical cooperation in the Earth
es. Signed at Bogota June 22, 1984.
ed into force June 22, 1984.

nica
m -ment relating to radio communications
t? en amateur stations on behalf of third
T s. Effected by exchange of telexes at
■i etown and Roseau Dec. 8, 1983 and
I ), 1984. Entered into force Mar. 10,

m 'ment amending the agreement of Dec.
1 28, 1977 (TIAS 8973), relating to trade
t tiles and textile products. Effected by
Q nge of notes at Cairo June 21 and 25,
'8 Entered into force June 25, 1984.

ji torial Guinea

0t ;ment concerning the provision of train-
■lated to defense articles under the U.S.
' program. Effected by exchange of
at Malabo Mar. 9 and 30, 1983.
■ed into force Mar. 30, 1983.

col to the convention with respect to
on income and property of July 28,

(TIAS 6518), as amended by the Pro-
of Oct. 12, 1970 (TIAS 7270), and Nov.
78 (TIAS 9500). Signed at Paris Jan.
84.
advice and consent to ratification:

28, 1984.

led by the President: July 16, 1984.

ention on the transfer of sentenced per-
Signed at Washington Jan. 25, 1983.
:e advice and consent to ratification:

28 1984.

ied by the President: July 17, 1984.

Memorandum of understanding on the par-
ticipation of France in the ocean drilling pro-
gram. Signed at Washington and Paris May
17 and June 13, 1984. Entered into force
June 13, 1984.

Memorandum of understanding on en-
vironmental cooperation. Signed at Paris
June 21, 1984. Entered into force June 21,
1984.

Gabon

Agreement concerning the provision of train-
ing related to defense articles under the U.S.
IMET program. Effected by exchange of
notes at Libreville Mar. 21, 1983 and July 5,
1984. Entered into force July 5, 1984.

Grenada

Agreement concerning the provision of train-
ing related to defense articles under the U.S.
IMET program. Effected by exchange of
notes at St. George's May 18 and 24, 1984.
Entered into force May 24, 1984.

Guinea

Agreement for the sale of agricultural com-
modities, related to the agreement of Apr.
21, 1976 (TIAS 8378). Signed at Conakry
June 11, 1984. Entered into force June 11,
1984.

Honduras

Agreement amending agreement of Dec. 16,

1983, as amended, for the sale of agricultural
commodities. Signed at Tegucigalpa June 19,

1984. Entered into force June 19, 1984.

India

Agreement extending and amending the
memorandum of understanding of July 18,
1978 (TIAS 9285) concerning furnishing of
launching and associated services for Indian
national satellite system (INSAT)-l
spacecraft. Signed at Washington and
Bangalore Apr. 10 and 25, 1984. Enters into
force upon exchange of diplomatic notes.

Indonesia

Agreement amending and extending the
agreement of Dec. 11, 1978 (TIAS 9609), for
cooperation in scientific research and
technological development. Signed at
Washington July 9, 1984. Entered into force
July 9, 1984.

Italy

Treaty on mutual assistance in criminal mat-
ters, with memorandum of understanding.
Signed at Rome Nov. 9, 1982.
Senate advice and consent to ratification:

June 28, 1984.

Jamaica

Agreement for the sale of agricultural com-
modities relating to the agreement of
Apr. 30, 1982 (TIAS 10495). Signed at
Kingston May 30, 1984. Entered into force
May 30, 1984.

Madagascar

Agreement concerning the provisions of
training related to defense articles under the
U.S. IMET program. Effected by exchange

of notes at Antananarivo Feb. 25, 1983 and
May 3, 1984. Entered into force May 3, 1984.

Mexico

Agreement amending the agreement of
June 2, 1977 (TIAS 8952), relating to addi-
tional cooperative arrangements to curb the
illegal traffic in narcotics. Effected by ex-
change of letters at Mexico May 29, 1984.
Entered into force May 29, 1984.

Morocco

Convention on mutual assistance in criminal
matters. Signed at Rabat Oct. 17, 1983.
Senate advice and consent to ratification:
June 28, 1984.
Ratified by the President: July 13, 1984.

Norway

Revised agreement for cooperation concern-
ing peaceful uses of nuclear energy, with an-
nexes and agreed minute. Signed at Oslo
Jan. 12, 1984.
Entered into force: July 2, 1984.

Supersedes agreement of May 4, 1967, as

amended (TIAS 6260, 6849).

Poland

Agreement extending the agreement of
Aug. 2, 1976, concerning fisheries off the
coasts of the U.S. (TIAS 8524, 10533, 10697).
Effected by exchange of notes at Washington
and Warsaw Mar. 7 and 30, 1984.
Entered into force: July 27, 1984.

Romania

Agreement amending the agreement of
Sept. 3 and Nov. 3, 1980. as amended (TIAS
9911, 10639), relating to trade in wool, man-
made fiber textiles, and textile products. Ef-
fected by exchange of letters at Washington
and New York June 12 and 22, 1984.
Entered into force June 22, 1984.

Sri Lanka

Agreement on cooperation in science and
technology. Signed at Washington June 18,
1984. Entered into force June 18, 1984.

Sweden

Supplementary convention to the extradition
convention of Oct. 24, 1961 (TIAS 5496).
Signed at Stockholm Mar. 14, 1983.
Senate advice and consent to ratification:

June 28, 1984.

Ratified by the President: July 13, 1984.

Convention for the avoidance of double taxa-
tion and the prevention of fiscal evasion with
respect to taxes on estates, inheritances, and
gifts. Signed at Stockholm June 13, 1983.
Senate advice and consent to ratification:

June 28, 1984.

Ratified by the President: July 13, 1984.

Thailand

Treaty relating to extradition. Signed at

Washington Dec. 14, 1983.

Senate advice and consent to ratification:

June 28, 1984.

Ratified by the President: July 18, 1984.

ember 1984

CHRONOLOGY

I .S.S.R.

.the memorandum of
June 20, 1963 (TIAS 5362),
30 1971 as
- . JO .9), concerning th<
link. Effected ;
of notes at Washington July 17. 1984.
id into force July 17. 1984.

Yemen (Sanaa)

Agreement for the sale of agricultural com-
modities, with related letter. Signed at Sanaa
.June 19, 1984. Entered into force June 19,

Zaire

Agreement concerning provision of training
related to defense articles under the U.S.
[MET program. Effected by exchange of
notes at Kinshasa Dec. 22, 1983, and
June 18, 1984. Entered into force June 18,
L984.

■Not in force.

2Not in force for the U.S.

July 1984

Note: The editors solicit readers' comments
on the value of the Bulletin's monthly
chronologies. Unless a positive response is
received, the chronologies will be discon-
tinued.

July 1-12

ACDA Director Adelman, visits Japan,
China, and Thailand to discuss arms control
and disarmanent issues, as well as chemical
ins use in Southeast Asia.

July 1

TASS reports that the Soviet Union's offer
for talks on banning weapons in outer space
remains open, but the Soviets reject an U.S.
at tempt to discuss other arms issues.

Guatemalans hold elections for an
88-member Constituent Assembly to write a
new constitution. An 1 l-member U.S. delega-
tion observes the election process.

Senatoi I lharles Mathias heads the U.S.
delegation at the inauguration of Richard von
Weizsaecker as Federal President of the
Federal Republic of Germany.

July 2

n imyko says the
'ii banning weapons in
space and imposing unacceptable conditions
on talks pr | fall.

White If

' utei ions talks

0 plans to d
rangements for nuclear arms talks.

U.S I
ing the UPTJ conference in Han i
tnethical po it
■ •n the integrity of the intei

I firms U.S. support I
, ion

The World Bank lowers interest rates to
9.89% on conventional loans to developing
countries for the next 6 months.

July 3

During a meeting with Soviet Ambassador
Dobrynin, Secretary Shultz reaffirms U.S.
commitment to hold space weapons talks in
September and repeats that the U.S. also in-
tends to discuss "offensive missiles that go
through space."

British Foreign Secretary Howe, meeting
with Soviet Foreign Minister Gromyko and
President Chernenko, assures the Soviets
that the U.S. has set no preconditions for
proposed outer space arms talks.

Soviet authorities refuse to allow U.S.
Ambassador Hartman to deliver a Fourth of
July television address, claiming it is part of
President Reagan's reelection campaign.

July 4-7

CARICOM's 13 members meet in Nassau to
discuss the future of the organization. They
agree to eliminate trade barriers and to grant
observer status to Haiti, Dominican Republic,
and Suriname.

July 4

Soviet authorities detain for 2 hours two U.S.
diplomats, accusing them of activities incom-
patible with their diplomatic status. They
were meeting in public with a Soviet citizen
when they were picked up.

The Lebanese Government begins im-
plementation of its security plan for the
Beirut area. The Lebanese Army redeploys
throughout Beirut and armed militias leave
the streets.

July 5-17

Secretary Shultz visits Hong Kong (July 7-8),
Malaysia (July 9-10), Singapore (July 10-11 ),
Indonesia (July 11-14), Australia (July
14-15), and New Zealand (July 15-17).

On July 12-13 Secretary Shultz attends
the ASEAN Foreign Ministers meeting in
Jakarta.

The ANZUS council holds its 33d meeting
(July 16-17) in Wellington. The Foreign
Ministers of ANZUS issue a joint communi-
que (July 17) reaffirming their commitment
lot lie Pacific pact.

July 6

State Department acting spokesman
Romberg reiterates U.S. protests on the
detention of two U.S. diplomats by the Soviet
I fnion

In response to a TASS report that the
Soviet Union's offer for September outer
spare weapon talk m Vienna remains open,
Stale Department acting spokesman
Romberg repeats the U.S. acceptance saying
there are no preconditions on having such
talks.

Senators East (North ( Carolina) and
Syniins (Idaho) urge President Reagan to
repudiate the SALT II treaty, terming it as
'dangerous to American security" ami

"unconstitutional."

The Lebanese Army assumes authority of
Beirut from militia forces.

July 7

Secretary Shultz says U.S. is willing to
negotiate some aspects of space weaponry]
with the Soviet Union if a plan for talks int
September can be worked out.

July 9-11

Second International Conference on
Assistance to Refugees in Africa is held inj
Geneva. Attorney General Smith heads tha '
U.S. delegation.

July 9

Greece tells the U.S. it will reassess the tre
ty permitting American military bases thel
for 5 years and the Voice of America
facilities unless the U.S. stops interfering!
its domestic affairs.

The U.S. Consulate in Belfast denies an
entry visa to Gerry Adams, leader of Sinn
Fein, the Irish Republican Army's political
wing.

President Reagan signs a proclamation!
designating today as African Refugees Rel^
Day.

Beirut airport opens for the first time 1
5 months.

July 10-14

Assistant Secretary Abrams visits Turkey I
assess human rights conditions.

July 10

While in Malaysia, Secretary Shultz says tt
death threat letters received in Malaysia,
South Korea, Zimbabwe, and other Third
World countries may be a "disinformation
campaign" used to embarrass the U.S. The
letters are allegedly from the Ku Klux Kla
and have postmarks from the Virginia and
Maryland suburbs of Washington, D.C.

In Singapore, Secretary Shultz says Vfl
nam is blocking efforts to improve relation!
with the U.S. by not providing informatior'
on 2,500 missing Americans from the Viet i
nam war and by its continued aggression il
Kampuchea.

President Reagan signs a proclamatior
designating July 10 as "Food for Peace Da
marking the 30th anniversary of the Food
Peace program. He also announces a pro-
posed five-point food aid initiative.

Bolivia reverses an earlier decision ana
says it will send six athletes to compete 1
the Summer Olympic Games.

World Bank's World Development Rep
predicts the Earth's population will reach
billion by the year 2050; the biggest increa
will be in poor countries where economic
growth will be stunted by a large populatk

July 11-15

West German Defense Minister Worner vi
Washington, D.C. On July 12 he meets wit
Secretary Weinberger to sign an agreemel
for deploying air defense missiles in Ger-
many. He meets with President Reagan. V
President Bush, and Acting Secretary of
State Dam on July 13.

July 1 1

State Department acting spokesman
Romberg says the theme of recent threat
ters sent to Third World countries in the

Department of State Bulle

CHRONOLOGY

ics is "dovetailed" with the Soviet

tion for its boycott and "bears all the
rks of a disinformation campaign."
eek Prime Minister Papandreou and
Embassador Stearns meet to discuss re-
I.S. -Greece disagreements,
le International Trade Commission
mends that President Reagan impose
quotas and tariffs on 70% of steel im-
for the next 5 years in order to protect
can steel producers and workers.
>verning Board of the International
y Agency meeting in Paris reaches
nent on a coordinated policy for draw-
wn contingency oil stocks of member
s in the event of a major supply disrup-

tate Department report on the situa-
El Salvador, Acting Secretary Dam
)1 Salvador's armed forces have im-
I in professionalism as well as in per-
nce. Other areas of progress in El
|lor include land reform, free elections,
shment of an effective judicial system,
e elimination of death squad activity.
ie U.S. announces it will no longer pro-
ilateral family planning assistance to
ies that use any method of force to
e population reduction objectives.

tter to Soviet President Chernenko,
ent Reagan says he is willing to delay
: oposed Vienna talks on space weapons
i Jovember to eliminate any Soviet con-
-B bout the presidential elections.
I 'w Zealand holds its general elections.
e abor Party, led by David Lange, wins
i. 5 seats in Parliament. The National
4 takes 38 seats and the Social Credit
«1 takes 2 seats.

Ij6

it Department acting spokesman

Berg confirms reports that 13 Western

■n ers of the London Suppliers Club met

L :embourg (July 11-13) to discuss

$ ds of strengthening controls on nuclear

«;s. Ambassador Kennedy headed the

3 elegation. Other participating countries

* Australia, Belgium, Canada, Federal
filic of Germany, France, Italy, Japan,
inbourg, the Netherlands, Sweden,

T) ?rland, and the U.K.

| mbassador Shlaudeman meets with
<a iguan Vice Minister of Foreign Affairs
1 ) in Atlanta.

I -esident Reagan signs a proclamation

■ ing the third week of July (July 15-21)
I iptive Nations Week."

:'"

■ ind Soviet Union initial an agreement to

• de the 21-year-old "Hot Line" for crisis
if unications. The new system will in-

1? word transmission threefold from its
■nt 64 words a minute and can also
■mit graphics.

■ resident Reagan expresses disappoint-
a over the Soviet Union's failure to join
Majority of the 35 nations that wish to
1 "concrete" negotiations at the Con-
Ice on Disarmament in Europe.

Vietnam returns the remains believed to
be eight U.S. servicemen.

Department of State acting spokesman
Romberg says the U.S. and 14 other COCOM
members reached agreement on a new com-
puter definition. This is part of a review to
define products and technologies to be con-
trolled to the East bloc.

The Guatemalan Supreme Electoral
Tribunal reports that the coalition of the Na-
tional Liberation Movement and the Na-
tionalist Authentic Central received the most
seats (23) in the new 88-member Constituent
Assembly, despite finishing third in the
July 1 voting. The Union of the National
Center and the Christian Democratic Party
each took 21 seats.

July 18

In a speech to the Honolulu Council on
Foreign Relations, Secretary Shultz says
Vietnam has agreed to meet next month to
discuss the Americans missing-in-action from
the Vietnam war.

The Drug Enforcement Administration
reports that two Nicaraguan Government of-
ficials are directly involved with cocaine
trafficking between South America and the
U.S.

Departments of State and Defense
release a report titled Nicaragua's Military
Buildup and Support for Central American
Subversion.

The Lebanese Government announces its
decision to restore diplomatic relations with
Iran.

Lebanese Defense Minister Osseiran
orders Israel to close its liaison office in
Dubayyah.

July 19

President Reagan attends a conference of
Caribbean heads of government in Columbia,
South Carolina.

Communist Party members leave the
French Government over economic policy
disputes.

State Department acting spokesman
Romberg says the U.S. regrets any move by
Lebanon to close Israel's liaison office.

July 20

At a White House ceremony marking today
as National POW/MIA Recognition Day,
President Reagan announces that Laos will
allow the U.S. to search for the remains of 13
U.S. servicemen at the site where an Air
Force gunship exploded in midair on
December 21, 1972.

On the 10th anniversary of the coup on
Cyprus, Department of State acting
spokesman Romberg reaffirms U.S. hope for
a reunited Cyprus.

July 21

Poland approves an amnesty bill to release
652 political prisoners within 30 days. The
Administration indicates that President
Reagan may ease some sanctions as a result
of the amnesty.

July 23

The Soviets suggest that the U.S. and Soviet
Union issue a joint statement to show a will-

ingness for serious talks on banning space
weapons.

El Salvador's President Duarte meets
with President Reagan, Vice President Bush,
Secretary Shultz, and congressional leaders
to appeal for increased U.S. economic and
security assistance.

July 24

Senate votes 93 to 0 to urge the Soviet Union
to deliver information on the Sakharovs to all
signatory nations of the Helsinki Final Act.

The Department of State presents the
Soviet Union with a counterproposal for an
agenda statement for the Vienna space
weapons talks projected to begin on
September 18. The latest proposal would
allow the U.S. and Soviets to discuss a broad
range of weapons issues, including strategic
and medium-range nuclear arms.

Speaking at a televised news conference,
President Reagan charges Nicaragua's San-
dinista regime with trying to destroy El
Salvador.

A U.S. Drug Enforcement Administra-
tion report says that Bulgaria uses illegal
narcotics trafficking to support terrorism and
as a "political weapon to destabilize Western
societies."

July 25-26

South Africa's Administrator General to
Namibia Willie von Niekerk and SWAPO
President Sam Nujoma meet to discuss end-
ing armed activities in Namibia.

July 25

President Reagan ends a ban on Soviet com-
mercial fishing in U.S. Pacific waters. The
Soviet allocation will be about 50,000 metric
tons.

U.S. F-14 fighters fly exercises over the
Gulf of Sidra which Libya considers to be its
territorial waters. No incidents are reported.

West Germany approves a $333 million
private bank loan to East Germany which has
promised to ease restrictions on contacts be-
tween East and West German citizens.

Israel closes its liaison office in
Dubayyah, Lebanon, after weeks of pressure
from the Lebanese Government.

Poland agrees to allow the Primate of
Poland and Catholic Church appointed of-
ficials to supervise a fund to assist private
farmers in an effort to relax U.S. imposed
economic sanctions and improve relations.

July 26

State Department acting spokesman
Romberg says three Libyan journalists were
denied visas, for security reasons, to cover
the Olympic Games.

State Department acting spokesman
Romberg says the election of Rabbi Kahane
to the Israeli Parliament could result in
Kahane losing his U.S. citizenship.

July 27

Soviet Deputy Foreign Minister Komplektov
says the latest U.S. response to a proposal to
begin talks in Vienna on outer space weapons
makes it impossible to conduct the kind of
negotiations the Soviets are interested in.

Member 1984

PRESS RELEASES

PUBLICATIONS

Whit okesman Speakes says the

ted the proposed talks without
preconditions and that such talks are not im-
ble.

In response to a speech made on July 26
by Fidel Castro. State Department acting
spokesman Romberg says Cuba will have to
demonstrate some fundamental changes in its
foreigi U.S. will agree to

comprehensive talks with Cuba.

Panama President elect Nicolas Ardito
Barli with President Reagan. Vice

President Bush, and Secretary Shultz at the
White House.

July 28

In a letter to UN Secretary General Perez de
Cuellar. Libya protests the presence of the
I f.S. F-14 fighters over the Gulf of Sidra on
July 25, citing it is a violation of Libyan ter-
ritorial waters.

Burundi President Jean-Baptiste Bagaza
is reelected as president of the Uprona Party
for a second 5-year term.

In Honduras, six U.S. citizens affiliated
with the AFL-CIO are arrested and deported
to Nicaragua for participating in a political
rally in Tegucigalpa on July 27.

July 29

Competition in the Summer Games of the
XXIII Olympiad begins in Los Angeles. A
record 140 countries send athletes.

A Venezuelan DC-9 jet, carrying 87 peo-
ple, is hijacked to Curacao. Four U.S. citizens
are among the passengers.

July :so

Six hostages from the hijacked Venezuelan
jet are freed.

The last of the Marine combat troops at
the U.S. Embassy in Beirut return to Navy
ships.

July 31

telan commandos storm the hijacked
1 ii ' 9 jet killing the two hijackers and rescu-
ing all remaining passengers. State Depart-
ment acting spokesman Romberg says U.S.
antiterrorism experts flew to the scene to of-
fer advice to local authorities.

U.S. and Cuba resume talks on migration,
including the Mariel issue. ■

Department of State

Press releases may be obtained from the < »f
..itions, Department of State,
"T.20.

\„

Datf

M57 7/5

Subject

Ntment of Dean Burch
as chairman of the l
delegation to the Space
Sen ii . Ad-

ministrative Radio I
ference (bii

*158 7/10 Owen W. Roberts sworn in
as Ambassador to the
Republic of Togo, July 9
(biographic data).

*159 7/10 John W. Shirley sworn in as
Ambassador to the United
Republic of Tanzania,
July 9 (biographic data).

"160 7/10 Weston Adams sworn in as
Ambassador to the
Republic of Malawi, July 9
(biographic data).

* 161 7/11 U.S. and Indonesia renew

Agreement for Cooperation
in Scientific Research and
Technological Develop-
ment, July 9.

162 7/12 Shultz: news conference,
Singapore, July 10.
*163 7/13 Shultz: remarks at banquet
hosted by Acting Foreign
Minister Datuk Abdullah
HJ. Ahmad Badawi, Kuala
Lumpur, July 9.

164 7/13 Shultz: remarks to the

ASEAN Foreign Ministers,
Jakarta.
*165 7/17 Shultz: statement at the

New Zealand Ministry of
Foreign Affairs, Well-
ington, July 16.

166 7/18 Shultz: news conference at
the American Embassy,
Kuala Lumpur, July 10.

* 167 7/18 Shultz: remarks at closing

of the bilateral meeting
with Indonesian President
Soeharto, Jakarta, July 13.
*168 7/19 Shultz: remarks at ANZUS
Council dinner, Wellington,
July 16.

169 7/19 Shultz: remarks at luncheon

for ANZUS Council, Well-
ington, July 16.

170 7/19 Shultz: address before the

Honolulu Council on
Foreign Relations,
Honolulu, July 18.

171 7/20 Shultz: news conference at

the Parliament House,
Canberra, July 15.

*172 7/23 Shultz: interview on "The
Today Show" by Bernard
Kalb.

*173 7/23 Shultz: arrival statement,
Jakarta, July 1 1 .
174 7/23 Shultz, Hayden, Cooper:

news conference at closing
of ANZUS Council Meet-
ing, Wellington, July 17.

*Not printed in the Billktin. ■

Department of State

Free single copies of the following Depart,
ment of State publications are available fn
the Correspondence Management Division!
Bureau of Public Affairs, Department of I
State, Washington, D.C. 20520.

Free multiple copies may be obtainecp
writing to the Office of Opinion Analysis ft
Plans, Bureau of Public Affairs, Departml
of State, Washington, D.C. 20520.

Secretary Shultz

Asia-Pacific and the Future, Honolulu Col
on Foreign Relations, Honolulu, Hawaj*
July 18, 1984 (Current Policy #598).

Challenges Facing the U.S. and ASEAN
Foreign Ministers of the Association $
South East Asian Nations (ASEAN), j
Jakarta, Indonesia, July 13, 1984 (Cul
rent Policy #597).

Arms Control

Nuclear Arms Control and the NATO Alii
ance. Ambassador Rowny, Royal Unit!
Services Institute, London, U.K.,
June 21, 1984 (Current Policy #591).

Preserving Freedom and Security, Deputj
Secetary Dam, Senate Foreign Relatk
Committee, June 13, 1984 (Current
Policy #590).

East Asia

Taking Stock of U.S. -Japan Relations, Asm
ant Secretary Wolfowitz, Subcommitt
on Asian and Pacific Affairs and Intel
tional Economic Policy and Trade, Ho j
Foreign Affairs Committee, June 12,
1984 (Current Policy #593).

The U.S.-China Trade Relationship, Assis
Secretary Wolfowitz, National Counct
U.S.-China Trade, May 31, 1984 (Curl
Policy #594).

U.S.-China Relations (GIST, July 1984).

Association of South East Asian Nations
(ASEAN) (GIST. July 1984).

Economics

The Bretton Woods Legacy: Its Continuil
Relevance, Assistant Secretary McCo
mack, 40th anniversary of the signing
the Bretton Woods agreements, Brett
Woods, New Hampshire, July 13, 198*
(Current policy #596).

Europe

Soviet Active Measures, Deputy Assistan
Secretary Knepper, Chicago Council (
Foreign Relations, Chicago, Illinois,
May 30, 1984 (Current Policy #595)

Narcotics

International Narcotics Control (GIST,
July 1984).

Western Hemisphere

Atlas of the Caribbean Basin, Harry F

Young, Bureau of Public Affairs, Dep ii

ment of State, July 1984. ■

Department of State Bull

NDEX

ptember 1984
lume 84, No. 2090

n Refugees Relief Day, 1984 (proclama-

ion) 64

an Rights Situation in Zaire and South

Africa (Abrams) 55

Control
■'! ANZUS Relationship: Alliance Manage-

nent (Wolfowitz) 60

osed Outer Space Negotiations (White

louse statements) 24

is of Conference on Disarmament in

urope (Reagan) 23

. Asia-Pacific and the Future

Shultz) 3

ralia

ANZUS Relationship: Alliance Manage-

nent (Wolfowitz) 60

tary Visits Asia; Attends ASEAN and

VNZUS Meetings (Cooper, Hayden,

Ihultz, text of ANZUS communique) .... 7

hia. The U.S. -China Relationship

Wolfowitz) 25

Oirress
■Jan Rights Situation in Zaire and South

kfrica (Abrams) 55

i Report on Cyprus (message to the

j. "ongress) 46

ang Stock of U.S. -Japan Relations

Wolfowitz) 28

a>ular Affairs. U.S. -Soviet Consular
agreement (Department statement) ... 42

H . as a Model and a Challenge (Skoug) . . 73

lb an Rights in Cuba (Abrams) 53

y us. 19th Report on Cyprus (message to

J he Congress) 46

>e doping Countries. World Economic

■ "respects (Wallis) 36

.a Asia

a ng Stock of U.S. -Japan Relations

<■ Wolfowitz) 28

h Asia Security: Economic and Political

i dimensions (Brown) 34

iciomics

£ -Pacific and the Future (Shultz) 3

fa Bretton Woods Legacy: Its Continuing

lelevance (McCormaek) 38

a ng Stock of U.S. -Japan Relations

Wolfowitz) 28

k -Asia Security: Economic and Political

: Dimensions (Brown) 34

I Id Economic Prospects (Wallis) 36

J alvador

Sending Voluntary Departure for El

1, Salvadorans (Abrams) 48

'« ident Meets With El Salvador's President

White House statement) 72

Id. Food for Peace Day, 1984 (Reagan,

a jroclamation) 46

'C;ign Assistance. President Meets With
121 Salvador's President (White House

statement) 72

(lada. A Force for Freedom in the

I Caribbean (Reagan) 1

itemala. Elections in Guatemala (White

(House statement) 71

lian Rights

Itive Nations Week, 1984 (proclamation) 51

lending Voluntary Departure for El

| Salvadorans (Abrams) 48

I lan Rights in Cuba (Abrams) 53

lian Rights Situation in Zaire and South

[Africa (Abrams) 55

locution and Restrictions of Religion in
(Nicaragua (Abrams) 49

Immigration. Extending Voluntary Departure

for El Salvadorans (Abrams) 48

Indonesia. Secretary Visits Asia; Attends
ASEAN and ANZUS Meetings (Cooper,
Hayden, Shultz, text of ANZUS communi-
que) 7

Industrialized Democracies. World Economic

Prospects (Wallis) 36

Japan. Taking Stock of U.S. -Japan Relations

(Wolfowitz) 28

Malaysia. Secretary Visits Asia; Attends
ASEAN and ANZUS Meetings (Cooper,
Hayden, Shultz, text of ANZUS communi-
que) 7

Monetary Affairs

The Bretton Woods Legacy: Its Continuing

Relevance (McCormaek) 38

World Economic Prospects (Wallis) 36

New Zealand

The ANZUS Relationship: Alliance Manage-
ment (Wolfowitz) 60

President Reagan's News Conference of

July 24 (excerpts) 2

Secretary Visits Asia; Attends ASEAN and

ANZUS Meetings (Cooper, Hayden,

Shultz, text of ANZUS communique) .... 7

Nicaragua

A Force for Freedom in the Caribbean

(Reagan) 1

Persecution and Restrictions of Religion in

Nicaragua (Abrams) 49

Review of Nicaragua's Commitments to the

OAS (Middendorf) 69

Nuclear Policy

The ANZUS Relationship: Alliance Manage-
ment (Wolfowitz) 60

The U.S. -China Trade Relationship

(Wolfowitz) 25

Organization of American States. Review of
Nicaragua's Commitments to the OAS

(Middendorf) 69

Pacific

The ANZUS Relationship: Alliance Manage-
ment (Wolfowitz) 60

Asia-Pacific and the Future (Shultz) 3

Poland. President Reagan's News Conference

of July 24 (excerpts) 2

Presidential Documents
African Refugees Relief Day, 1984 (proclama-
tion) 64

Captive Nations Week, 1984 (proclamation) 51
Food for Peace Day, 1984 (proclamation) . .46

A Force for Freedom in the Caribbean 1

19th Report on Cyprus (message to the

Congress) 46

President Reagan's News Conference of

July 24 (excerpts) 2

Status of Conference on Disarmament in

Europe 23

U.S. -Soviet Bilateral Relations (White House

fact sheet) 41

U.S. -Soviet Union Expand "Hot Line"

Agreement (White House fact sheet) ... 45

Visit of Sri Lankan President (Jayewardene,

Reagan) 65

Publications. Department of State 82

Refugees. African Refugees Relief Day,
1984 (proclamation) 64

Science and Technology. The U.S. -China

Trade Relationship (Wolfowitz) 25

Security Assistance

President Meets With El Salvador's President
(White House statement) 72

U.S. -Asia Security: Economic and Political
Dimensions (Brown) 34

Singapore. Secretary Visits Asia; Attends
ASEAN and ANZUS Meetings (Cooper,
Hayden, Shultz, text of ANZUS communi-
que) 7

South Africa. Human Rights Situation in
Zaire and South Africa (Abrams) 55

Sri Lanka. Visit of Sri Lankan President
(Jayewardene, Reagan) 65

Congress

Taking Stock of U.S. -Japan Relations
(Wolfowitz) 28

U.S.-Asia Security: Economic and Political
Dimensions (Brown) 34

The U.S. -China Trade Relationship
(Wolfowitz) 25

Treaties

Current Actions 78

U.S.-Soviet Consular Agreement (Department
statement) 42

U.S.-Soviet Union Expand "Hot Line" Agree-
ment (Reagan, White House fact sheet) . 45

U.S.S.R.

Proposed Outer Space Negotiations (White
House statements) 24

Status of Conference on Disarmament in
Europe (Reagan) 23

U.S.-Soviet Bilateral Relations (Reagan,
White House fact sheet) 41

U.S.-Soviet Consular Agreement (Department
statement) 42

U.S.-Soviet Union Expand "Hot Line" Agree-
ment (Reagan, White House fact sheet) . 45

Western Hemisphere

Extending Voluntary Departure for El
Salvadorans (Abrams) 48

A Force for Freedom in the Caribbean
(Reagan) 1

Human Rights in Cuba (Abrams) 53

Persecution and Restrictions of Religion
in Nicaragua (Abrams) 49

President Reagan's News Conference of
July 24 (excerpts) 2

Zaire. Human Rights Situation in Zaire
and South Africa (Abrams) 55

Name Index

Abrams, Elliott 48, 49, 53, 55

Brown, William A 34

Cooper, Warren 7

Hayden, William 7

Jayewardene, J. R 65

McCormaek, Richard T 38

Middendorf, J. William II 69

Reagan, President 1, 2, 23, 41, 45, 46, 48

51, 64, 65

Shultz, Secretary 3,7

Skoug, Kenneth N. Jr 73

Wallis W. Allen 36

Wolfowitz, Paul D 25, 28, 60

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